FRANKFURT (Reuters) - Germany's financial watchdog has ordered Deutsche Bank DBKGn.DE to do more to prevent money laundering and "terrorist financing," and has appointed a third party to assess progress.

FILE PHOTO: A London taxi is driven past a Deutsche Bank building in the City of London March 30, 2016. REUTERS/Russell Boyce/File Photo

BaFin said on Monday this was the first time it had made such an appointment at a bank related to money laundering.

European regulators are stepping up their scrutiny of banks’ dealings with their customers following a series of scandals.

The head of Danske Bank DANSKE.CO resigned last week after Denmark's biggest bank said an investigation had shown that many of the 200 billion euros ($236 billion) of payments through its small Estonian branch were suspicious.

Last year, Deutsche Bank was fined nearly $700 million here for allowing money laundering.

Germany’s biggest bank said in a statement it agreed with BaFin that it needed to improve its processes to properly identify clients.

“We have the strong commitment to operate within regulatory compliant practices for the identification of our clients,” Deutsche Bank said.

Neither BaFin nor Deutsche Bank gave details of the new measures the bank would adopt.

No new scandal or case triggered BaFin’s move, two people with knowledge of the matter said, speaking on condition of anonymity.

In August, Reuters reported that Deutsche Bank had uncovered further shortcomings in its ability to fully identify clients and the source of their wealth.

BaFin said it had appointed KPMG as its special representative for a three year period to assess Deutsche Bank’s progress.

The intervention is another blow to the bank’s reputation.

Deutsche Bank has made management changes and announced a strategic overhaul that includes thousands of job cuts and scaling back its global investment bank as it battles to recover from three consecutive years of losses.

In January 2017, Deutsche Bank agreed to pay U.S. and British regulators $630 million in fines over artificial trades between Moscow, London and New York that authorities said were used to launder $10 billion out of Russia.

The U.S. Federal Reserve fined the bank an additional $41 million in May 2017 for failing to ensure its systems would detect money laundering.

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