A Danish bank, which once boasted a squeaky-clean reputation, has just been charged with money laundering involving at least $230 billion over a period of only two years. Danske Bank, owned by the Maersk shipping family, has already seen the ousting of its chief executive and chairman.

The scam centered on the bank’s once obscure branch in Estonia, which it now admits became one of Danske’s most profitable operations as it took in tens of billions of suspect foreign currency, largely from Russians or citizens from former Soviet States.

But the ripples from this major financial scandal are spreading beyond Copenhagen. Thursday police and financial regulators conducted a high-profile raid on the prestigious Frankfurt headquarters of mighty Deutsche Bank.

The whistleblower at the Danish bank, who first revealed its substantial money-laundering operation, also said that major European banks had been involved. It is being alleged that Deutsche Bank used an American subsidiary to help launder around $150 billion as part of Danske’s Estonian scam.

Given that the Danish bank has accepted its guilt and surrendered its records to investigators, the problems for Deutsche Bank and any other European institutions that shared in the high fees earned from laundering huge quantities of illegal funds also look considerable.

But over and above this apparently wrong-doing by supposedly respectable financial institutions, there is something else very alarming here. This extensive financial scam was taking place in plain sight of auditors and regulators. The primary responsibility of the in-house compliance team at Danske Bank, as well as its external auditors, was to spot that there was something very strange happening in Estonia, which, relative to the bank’s other business, was a backwater.

The sudden surge in profits generated from the Estonian branch ought to have raised eyebrows. But instead it appears that at the highest levels of this bank, there was gleeful rubbing of hands.

But what were these executives thinking of? Even fifty years ago, banking left a trail of actual paper which might go astray or be falsified. Today every financial transaction is cleared and date-stamped to the second through a central processing system.

Counter-parties have records that must needs to tally with centrally-held data, which in turn are kept effectively for ever. Thus, once suspicion is aroused and assuming regulators are minded to investigate, there is simply no hiding place for this sort of financial crime.

What happened in Estonia, as Danske threw doors open to individuals bearing suitcases packed with extraordinary amounts of cash, was bound to come out, even if someone within the bank had not chosen to blow the whistle.

When the returns from the small Baltic operation suddenly became stellar, external auditors should have, but it seems, did not ask much in the way of questions. And shareholders studying the accounts should have been surprised, albeit pleasantly, at the Estonian branch’s contribution to profits.

But none of this happened because the greed factor overcame principles and prudence. The result has been humiliating firings and extremely serious damage to at least one European bank. And of greater importance is the wider damage to the reputation of international banking, which has yet to shake off the obloquy of the 2008 financial crash which its purblind madness brought about.