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* Private investors in Europe are now shifting focus to technology-driven challenger banks following successful investments in areas such as payments, private equity and venture capital, market participants told S&P Global Market Intelligence. Fund managers are also looking to invest in companies working to improve the function of incumbent banks and financial institutions.
* The European Securities and Markets Authority published a new simulation framework for stress tests on investment funds, saying that under a simulation, as much as 40% of high-yield bond funds could be hit by liquidity problems.
* Facebook Inc.'s proposed Libra cryptocurrency falls under a "big gap" in the EU's financial regulation system, Reuters wrote, citing European Banking Authority Chair Jose Manuel Campa. Swiss National Bank Chairman Thomas Jordan, meanwhile, said that digital coins linked to foreign currencies such as Libra, could impact monetary policy in Switzerland.
* Over a hundred London-based asset managers, trading platforms and investment firms have thus far clinched licenses for their post-Brexit hubs in the EU, Steven Maijoor, chair of the European Securities and Markets Authority, told Reuters. Maijoor added that there has been good progress in preparing for a possible no-deal Brexit scenario.
* EU officials cautioned that U.K. Prime Minister Boris Johnson's plan to undercut EU rules after Brexit would lead to unwillingness from the bloc to sign a trade deal with the U.K., the Financial Times reported. It comes after Johnson's team said they would drop the earlier promises of Theresa May that the U.K. and the bloc would have a level playing field in exchange for a free trade deal.
UK AND IRELAND
* Johnson's government will put forward a new motion for Sept. 9 seeking an early general election ahead of the Oct. 31 Brexit date, House of Commons Leader Jacob Rees-Mogg said. This comes after lawmakers passed a bill that blocks a no-deal Brexit and could force another delay to the U.K.'s departure from the EU.
* Meanwhile, Johnson said he would "rather be dead in a ditch" than postpone the Oct. 31 Brexit deadline, news outlets including BBC News and Reuters covered. Johnson's brother, Jo, resigned yesterday as a member of Parliament and a minister, citing an "unresolvable tension."
* Britain is being plagued by a "serious epidemic" of financial crime, including fraudulent mini-bond scams, inappropriate pension investments, and cryptocurrency or foreign exchange scams, Yahoo Finance UK wrote, citing Charles Randell, chair of the Financial Conduct Authority. Speaking at a symposium, Randell called for cooperation between the government and the private sector due to the scale of the problem.
* Curtis Banks Group PLC CEO Will Self said acquisitions remain a priority in the firm's strategy as it is "well-positioned" for consolidation. He added that Curtis Banks' business is "largely immune" from industry pressure, particularly concerns about unregulated investments in self-invested personal pensions, or SIPPs.
GERMANY, SWITZERLAND AND AUSTRIA
* Felix Hufeld, president of German market watchdog Bafin, said he would not advise lawmakers to ban lenders from charging negative interest rates on retail deposits, echoing the stance of the country's central bank, Reuters reported. The government is looking into the legality of such a ban, with Finance Minister Olaf Scholz warning banks against charging clients.
* Deutsche Bank AG is laying off dozens of staff in its global fixed-income unit that had been largely spared from earlier job cuts under its planned revamp, insiders told Bloomberg News. The cuts are said to be mainly related to underperforming divisions such as the Latin America credit business, which the bank will eliminate entirely.
* Hans-Walter Peters confirmed Commerzbank AG CEO Martin Zielke as his pick to succeed him as the next president of the German Banking Association, the trade body representing all privately held banks in the country. The association is set to hold board elections in April 2020.
* UBS Group AG's cost-cutting plan for its investment banking arm will involve a reorganization but not include a specific number of job cuts, an insider told Reuters. The reorganization would reportedly be implemented by 2019-end. UBS is streamlining its investment bank by merging the equities and foreign exchange and fixed income business units into a global trading division, among other things, Neue Zürcher Zeitung reported.
* SIX Group AG saw revenues and volumes rise after EU and Swiss investors lost direct access to each other's bourses in July due to a trade pact dispute between the bloc and Switzerland, CEO Jos Dijsselhof told Reuters. He, however, warned that the dispute may hit investments in the Swiss financial markets in the long run.
FRANCE AND BENELUX
* Belgium's central bank has warned banks and insurers to be more cautious when it comes to mortgage lending, and may ask lenders to introduce "certain norms and criteria," De Tijd reported, citing a spokesman. Although the spokesman did not disclose further details, the measures could include loan to value-criteria, the paper said.
* Insurers and reinsurers are facing a bill of $837 million over the crash of the Ethiopian Airlines Boeing 737 Max in March, according to an estimate produced by Scor SE, Les Echos reported.
* ING Bank NV is being sued in Belgium by Hugues Mulliez of the family that owns Auchan and Decathlon stores, who claims that the bank refused to honor an agreement made in 2014 to reduce the interest rate on a €1 million mortgage taken out in 2006, L'Echo reported.
SPAIN AND PORTUGAL
* Portugal's Novo Banco SA confirmed the sale of nearly €3 billion of nonperforming loans to U.S. fund manager Davidson Kempner, saying the transaction reduced its bad loan ratio to 15% from 20.7% at the end of June, Jornal de Negócios reported. A source at the bank said the discount on the operation was 89% of gross book value. Expresso noted that the sale price also represented a 35% discount against the net value of the loans as recorded on Novo Banco's balance sheet, implying losses of €106 million to the bank this year.
* Meanwhile, Novo Banco said the state could end up holding 10.3% of its share capital due to the conversion rights of deferred tax assets following the net losses posted between 2015 and 2018, Jornal de Negócios reported. Under the scheme, loss-making banks were able to convert deferred tax assets into so-called state credits.
* Portugal's CMVM securities regulator has refused to consider complaints from former Caixa Geral de Depósitos SA directors about an assessment conducted by Ernst & Young into the management of the state-run bank, Jornal de Negócios reported. The EY report identified a number of weaknesses at the bank.
* The board of directors at Portugal's Banco Montepio, formerly Caixa Económica Montepio Geral SA, is plagued by mounting tension and splits, leading to the resignation of Luís Guimarães as head of the bank's internal audit committee despite appeals by the central bank for him to stay on until year-end, Público reported. He had told the regulator he would step down from Sept. 30, citing "instability" in the savings bank's governance.
ITALY AND GREECE
* Bank focused technology company Sia, which is due to be taken over by the Cassa depositi e prestiti SpA by the start of October, could change the perimeter of a deal to take over Austrian credit card group Card Complete Service Bank in which Bank Austria, controlled by UniCredit SpA, has a 50.1% stake and Raiffeisen Bank International has the remaining 49.9%, MF reported.
* Malacalza Investimenti has no reasons to reduce its 27.5% stake in Banca Carige SpA as its value is still above the book value, Il Messaggero wrote.
NORDIC COUNTRIES
* Vienna Insurance Group AG plans to offer insurance to corporate customers in Sweden, Norway, Denmark and Finland through branch offices in Stockholm, Copenhagen and Oslo, with Finnish customers served through the framework of the freedom to provide services.
* Sweden's central bank maintained its repo rate at negative 0.25% and reiterated that the interest rate is expected to be raised toward 2019-end or early 2020. However, the increase would be slower than previously expected due to low interest rates overseas and "worsened sentiment."
EASTERN EUROPE
* Serbia agreed to acquire the combined 34.58% stake of the European Bank for Reconstruction and Development and IFC Capitalization Fund in Komercijalna banka a.d. Beograd, a move that would take the government's interest in the lender to 83.23%.
* BDDK, Turkey's banking regulator, urged banks to write off loans to some energy projects and classify them as nonperforming loans in a bid to clean up lenders' balance sheets and boost credit in the economy, sources told Bloomberg News. However, many lenders are reportedly adamant about the regulator's proposal.
* Following Sberbank and FK Otkrytie Bank, JSC Alfa-Bank, PJSC ROSBANK and Vozrozhdenie Bank will no longer accept euro deposits given the negative interest rate set by the ECB, Banki.ru wrote.
* The Russian Sixth Appellate Commercial Court upheld the decision of the Amur Region Commercial Court obliging Baring Vostok to transfer a 10% stake in Vostochny Bank to Finvision under the call option agreement, Vedomosti reported.
IN OTHER PARTS OF THE WORLD
Asia-Pacific: Axa mulls sale of Malaysian JVs; China opens interbank FX market to 3 brokerages
Middle East & Africa: FirstRand posts results; Sanlam targets Egypt; Ghana sees room for policy easing
Latin America: Chile cuts 2019 growth forecast; Mastercard stops servicing 2 Venezuelan banks
North America: First Busey considering another deal; BofA recognizes $2.1B impairment charge
Global Insurance: Prudential Financial buying insurtech; Scor review; Dorian threatens Carolinas
NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE
ING CEO: Banks can go green fast but 'indirect footprint' is a challenge: Lenders can take environmentally friendly steps quickly but it is more challenging to incentivize their customers to become sustainable, Ralph Hamers said.
L&G's new pension insurance product cheaper than superfunds, but different: A new pension risk transfer product the group is developing will be less expensive than the solution offered by the new breed of pensions superfunds and offers a 10% to 15% discount to bulk annuities for a "typical pension scheme."
Sheryl Obejera, Ed Meza, Danielle Rossingh, Gerard O'Dwyer, Roman Savinov, Yael Schrage, Brian McCulloch, Praxilla Trabattoni and Helen Popper 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.
