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ECB cuts rate, rolls out new stimulus package; HKEX open to sweetening LSE offer

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ECB cuts rate, rolls out new stimulus package; HKEX open to sweetening LSE offer

* The ECB lowered its rate on the deposit facility by 10 basis points to negative 0.50%, while keeping other rates unchanged, and said it will restart bond purchases at a monthly pace of €20 billion. The bank will relaunch the asset repurchase program on Nov. 1, which is expected to run "for as long as necessary" and end "shortly" before it begins hiking interest rates. The regulator also introduced a two-tier system for reserve remuneration, exempting part of banks' excess liquidity holdings from the negative deposit facility rate.

* The European Parliament's Brexit Steering Group drafted a resolution that would again extend the U.K.'s departure from the EU in October, Business Insider reported. EU members would reportedly support another extension if it is needed to avoid a no-deal Brexit, to hold a general election or a referendum or to approve a withdrawal agreement, among other purposes.

* Hong Kong Exchanges & Clearing Ltd. is open to offering more cash for its nearly £32 billion offer to acquire London Stock Exchange Group PLC, the Financial Times reported. HKEX's current offer values the British bourse at £83.61 per share, three quarters of which will be in the form of HKEX stocks. The Hong Kong exchange, however, will not change the terms of its proposal until LSE responds. Meanwhile, LSE's board is expected to meet in the coming days to decide on the unsolicited offer, Reuters reported.

* The Swiss financial market supervisory authority said the country is ready for heightened international scrutiny over its oversight of Facebook Inc.'s planned cryptocurrency Libra, Reuters reported, citing CEO Mark Branson. Meanwhile, French Finance Minister Bruno Le Maire said the country is not inclined to allow the development of the digital currency on European soil due to concerns related to systemic financial risks, risks for sovereignty, as well as the potential for abuse of market dominance.

UK AND IRELAND

* HSBC Holdings PLC's management in France denied media reports suggesting that the lender plans to dispose of its unprofitable retail banking arm in the country, Reuters reported, citing a union source.

* U.K.'s Nationwide Building Society said that due to a surge in payment protection insurance claims toward the Aug. 29 deadline of claims filing, an incremental charge will be added to its earlier provisions for PPI claims in the range of £20 million to £50 million.

* London-based RSA Insurance Group PLCs U.K. and International division combined its commercial risk solutions and global risk solutions businesses to create a single business unit focused on commercial lines.

* Irish lender Permanent TSB PLC, a wholly owned unit of Permanent TSB Group Holdings PLC, agreed to sell its "Glas Tranche II" portfolio of nonperforming loans, which has a gross balance sheet value of €506 million, to two affiliates of U.S.-based private equity fund Lone Star for €264 million in cash.

* A U.S. court has upheld the conviction of Mark Johnson, HSBC's former global head of foreign exchange cash trading, for his role in defrauding U.K.-based Cairn Energy PLC by withholding material information in a $3.5 billion currency trade, Reuters wrote. Johnson was sentenced to two years in prison in October 2017.

* Neil Woodford's Woodford Patient Capital Trust was forced to write down the valuation of its stake in yet another holding, reducing the trust's net asset value by 4 pence per share, media outlets including the Financial Times and Reuters reported.

GERMANY, SWITZERLAND AND AUSTRIA

* Deutsche Bank AG has come forward as the first of 16 financial services firms to settle an investor lawsuit accusing it of knowingly rigging prices of bonds issued by the Federal National Mortgage Association, or Fannie Mae, and Federal Home Loan Mortgage Corp., or Freddie Mac, from Jan. 1, 2009 to Jan. 1, 2016, to make higher profits, Reuters reported. The German lender will pay a $15 million settlement amount but denied any wrongdoing. The bank has also struck a cooperation deal with the U.S. Justice Department's antitrust investigators to provide information about other banks in exchange for leniency, Bloomberg News wrote.

* Zurich-based UBS Group AG appointed Markus Wetter head of its Swiss equity capital markets and corporate solutions business, effective immediately, Reuters reported. Wetter succeeds Thorsten Pauli, who left to join Bank of America Corp.

* As part of its efforts to streamline operations, Landesbank Hessen-Thüringen Girozentrale is set to reduce the number of its business units and cut jobs, Handelsblatt reported. The lender is not expected to lay off employees but rather reduce staff through early retirement and the elimination of certain posts.

* Deutsche Börse AG's Clearstream unit may have had a more significant role than previously known in Germany's biggest tax scandal, and may have misled authorities about it, Bloomberg reported, citing a warrant in the case. According to the court document, Clearstream employees and managers were informed "in detail" about how so-called cum-ex deals were organized and "actively supported" transactions. They also met with clients to talk about how trades were handled, booked and reviewed. The warrant authorized raids of Clearstream's offices conducted by prosecutors two weeks ago.

FRANCE AND BENELUX

* French asset manager Ardian pulled in $2.5 billion for its fifth co-investment fund, more than doubling the $1.2 billion raised for its fourth-generation fund in 2015. More than 190 investors across Europe, the U.S. and Asia, comprising pension funds, insurers, high-net-worth individuals, endowments, foundations and financial institutions, committed to Ardian Co-Investment Fund V.

* Intertrust CFO Hans Turkesteen will be replaced by controller Rogier van Wijk at the end of March, Het Financieele Dagblad reported. Turkesteen has only been in the job for a year, while Van Wijk joined the company in 2017.

SPAIN AND PORTUGAL

* CaixaBank SA is launching its new consumer financing unit, CaixaBank Payments & Consumer, born from the merger by absorption of CaixaBank Payments into CaixaBank Consumer Finance. The move was decided under the entity's 2019-2021 strategic plan and aims to boost consumer financing, Expansión reported.

* Millennium BCP is negotiating a real state portfólio with an estimated value of €210 million, Jornal de Negócios reported. British fund AnCap Financial Partners is interested in the package, as BCP continues with the process of getting rid of nonperforming assets. The bank's administrative board also approved the project for the fusion with Banco de Investimento Imobiliário, a subsidiary entirely owned by BCP, the paper added.

ITALY AND GREECE

* The European Commission said it granted Italy an extension of the deadline by which Banca Monte dei Paschi di Siena SpA must issue a certain amount of subordinated debts, noting that Italy had proposed additional commitments to further cut the bailed-out bank's cost base and restore its viability, Reuters reported.

* Gruppo Doris and the Fininvest holding company controlled by the family of former Italian Prime Minister Silvio Berlusconi have agreed to temporarily suspend their shareholding pact in Banca Mediolanum SpA set to expire this weekend, MF said, as they wait to see the outcome of Fininvest's appeals to the European Court of Justice and in Italy against decisions by the ECB and the Bank of Italy limiting Fininvest's stake in Banca Mediolanum to 9.999%.

* Banca del Fucino SpA agreed to sell a €100 million nonperforming loan portfolio to J-Invest, a financial firm specialized in NPLs and distressed assets, Il Sole 24 Ore said.

NORDIC COUNTRIES

* The Danish central bank reduced its interest rate on certificates of deposit by 10 basis points to negative 0.75%, effective Sept. 13. Danish banks have deposits of 199 billion kroner in the central bank, and the rate cut might cost them 1.5 billion kroner, Berlingske Business noted. The bill for this is likely to be sent to business customers, analysts said.

* EQT Partners AB said it expects its IPO of 190,596,780 shares to price at a range of 62 Swedish kronor to 68 kronor per share, or 11.8 billion kronor to 13.0 billion kronor in the aggregate. The Swedish private equity firm said its shares are set to trade on Nasdaq Stockholm starting Sept. 24 under the ticker EQT.

* Swedish financial regulator Finansinspektionen has approved fintech Northmill's application for a banking license, Affärsvärlden reported. Northmill has credit operations in the Nordic region, but aims to expand to other European countries.

EASTERN EUROPE

* The Turkish central bank slashed its policy rate by 325 basis points to 16.5% amid ongoing economic recovery and disinflation, a move that did not seem as aggressive as markets had predicted. The Turkish lira gained 1.1% around 7:30 a.m. ET.

* Financial services companies in Turkey are mulling taking a majority share in Japan Credit Rating Agency's local subsidiary, in a bid to launch a domestic ratings firm and reduce the industry's reliance on the big three global agencies, Standard & Poor's, Moody's and Fitch, Reuters reported.

* Slovenia-based Nova Ljubljanska banka d.d. has made a nonbinding offer to buy Serbian lender Komercijalna banka a.d. Beograd, Reuters wrote, citing Slovenian newspaper Dnevnik.

* Latvian lender AS AS PNB Banka was declared insolvent yesterday, a month after the ECB listed it among the banks failing or likely to fail due to insufficient capital, Bloomberg News wrote.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: HKEX open to up LSE bid; Malaysia keeps key rate; Salesforce funds open banking

Middle East & Africa: KFH seeks to buy AUB in $8.8B deal; Japan's MUFG to build MEA banking network

Latin America: Argentina unveils more currency controls; Brazil tax chief sacked

North America: Square sues San Francisco; Va. banks in deal; NY bank warns of possible fraud

Global Insurance: Uninsured children in US up; mining insurance commentary; opioid settlement

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

ECB surprises with commitment to open-ended quantitative easing: In a bid to bolster the ailing eurozone, the ECB delivered an even more dovish policy package than had been expected Sept. 12, including a rate cut and open-ended quantitative easing.

Cat bond investors review strategies after 2 years of losses: Investors are switching managers and re-examining the benefits of investing in insurance risk, but have not fled the asset class, say insurance-linked securities specialists.

Sheryl Obejera, Ed Meza, Danielle Rossingh, Esben Svendsen, Heather O'Brian, Brian McCulloch, Praxilla Trabattoni and Mariana Aldano contributed to this report.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.