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Citi only big US bank to commit to UN climate principles; IEX exits listings biz

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Citi only big US bank to commit to UN climate principles; IEX exits listings biz

Citigroup Inc. is so far the only major U.S. bank that has become a part of a group of 130 banks that agreed to adopt the United Nations-backed Principles for Responsible Banking, or PRB. The group represents $47 trillion in assets, or a third of the global banking industry. By signing up to the principles, the banks agreed to strategically align their business with the goals of the Paris Agreement on Climate Change and the Sustainable Development Goals.

In a statement to Bloomberg News, Goldman Sachs Group Inc., which did not commit to the PRB, said it was working on several target-related efforts similar to the PRB. And Wells Fargo & Co. said it was making efforts toward achieving goals it had set in 2016 to address social, economic and environmental challenges over a five-year period. Other big U.S. banks — JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley — declined to comment to the news outlet.

Tupelo, Miss.-based BancorpSouth Bank agreed to acquire Texas First Bancshares Inc. in a cash-and-stock deal that provides a collar to the total deal value ranging from $38.8 million to $46.5 million. The deal is expected to close in the first half of 2020.

The House Financial Services Committee approved legislation that will require public companies to disclose environmental, social and governance metrics and the effect they have on their long-term business strategy, Pensions & Investments reports. H.R. 4329, the ESG Disclosure Simplification Act of 2019, would also establish a Sustainable Finance Advisory Committee at the U.S. Securities and Exchange Commission that will recommend the types of ESG disclosure that should be required. The bill is sponsored by Rep. Juan Vargas, D-Calif.

Rep. Ed Perlmutter, D-Colo., expanded the Secure and Fair Enforcement Banking Act, or SAFE Banking Act of 2019, to include protections for industrial hemp businesses, American Banker reports. The bill that would exempt depositories that offer banking services to cannabis-related businesses from a slew of regulatory requirements, was approved by the House Financial Services Committee in March, according to the report. The full House is reportedly expected to vote on the bill in the week of Sept. 23.

IEX Group Inc. has decided to exit its listings business after its only listed company, Interactive Brokers Group Inc., decided to switch back to Nasdaq, sources told The Wall Street Journal. Interactive Brokers, which became IEX's first listed company only a year ago, is reportedly concerned about how its shares have traded on IEX.

Citigroup recently dismissed many of its research analysts in London, Moscow, Dubai, Latin America, New York and San Francisco as the banking giant looks to cut about 400 employees from its trading division, according to a Bloomberg News report. The job cuts come amid an environment of diminishing commissions and industry rule changes.

A new report published by the Bank for International Settlements indicates that the world's largest, most complex and interconnected banks have become less systemically important relative to peers. Researchers used the Basel Committee on Banking Supervision's framework for identifying global systemically important banks and found that the scores measuring their systemic importance have declined as regulatory proxies for their interconnectedness and complexity have diminished.

At an event at the Federal Reserve Bank of New York today, U.S. Treasury Department's Deputy Secretary Justin Muzinich is expected to unveil a plan to publicly release data on Treasuries trading, Bloomberg News reports, citing an anonymous Treasury official. The plan comes after years of review and debates over the need for transparency in the $16 trillion Treasury market, the world's biggest bond market. The details of the plan are expected to impact several market participants, ranging from banks to high-frequency traders.

The SEC fined The Bancorp Inc. $1.4 million in a settlement related to an investigation that the bank had understated its loan allowances and lease losses. The Wilmington, Del.-based bank allegedly failed to, among other things, classify certain loans and to take appropriate charges for individually impaired loans understating the allowances and losses, and assign correct risk ratings and did not identify certain large lending relationships as containing substandard loans, the regulator said.

In other parts of the world

Asia-Pacific: China sovereign fund posts FY'18 loss; NAB chief to start in December

Europe: Commerzbank job cuts; Deutsche, BNP ink equities deal; UniCredit names chair

Middle East & Africa: Investec warns of lower fiscal H1 profit; US sanctions Iran's central bank

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Community banks hustling to gain customers, talent from BB&T-SunTrust merger: Community banks overlapping with SunTrust Banks Inc. and BB&T Corp.'s footprints are working hard to gain talent and clients from the combined Truist entity. At the Janney Community Bank CEO Forum in Atlanta, community banks said their relationship-focused business models are helping them gain customers and employees in the wake of the merger, the largest in years.

Clarida: Fed going 'one meeting at a time,' divisions over next steps healthy: Fed Vice Chairman Richard Clarida said the Federal Reserve is taking its upcoming interest rate decisions "one meeting at a time," and the disagreements within the central bank about the outlook are healthy.

Home equity loans decrease nearly 8% YOY in Q2, while credit quality improves: Home equity lines of credit and junior liens at U.S. banks and thrifts in the second quarter declined 1.8% from the linked quarter and 7.8% from the 2018 period to $402.23 billion.

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng declined 0.81% to 26,222.40.

In Europe, around midday, the FTSE 100 was down 0.53% to 7,305.56, and the Euronext 100 was down 0.86% to 1,089.26.

On the macro front

The Chicago Fed National Activity Index and the PMI Composite Flash are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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