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Helicopter money an ECB no-go; HSH changes chief; France tightens insurance regulations


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Helicopter money an ECB no-go; HSH changes chief; France tightens insurance regulations

Helicopter money not a policy option: In a March 23 interview withPolitico published by the ECB yesterday, Executive Board MemberBenoît Cœuré said the concept of "helicopter money" is not currentlypart of discussions in the ECB Governing Council and expressed skepticism andcircumspection about the idea. Cœuré said: "To be honest, I don't see howit could work without some kind of risk-sharing with governments, which couldbe practically and legally problematic."

* The European Banking Authority yesterday published a report showing that the introduction of the bonuscap on EU banks had no significant effect on institutions' financial stabilityand cost flexibility, and that remuneration practices were still notsufficiently harmonized across the union. The report found that the number ofhigh earners in EU banks increased 21.6% to 3,865 earners in 2014 from a yearago, while the average ratio between variable and fixed remuneration for highearners dropped to 127% from 317% in 2013. Bloomberg News, the FinancialTimes and Reuters have reports.

* Standard & Poor's Ratings Services cut its 2016 growth projectionsfor the eurozone economy to 1.5% from 1.8% in November 2015, and now expectsgrowth in the region to reach 1.6% next year. The rating agency attributed itsaction to a nosedive in financial conditions at the start of the year, sayingthe eurozone economy was "flying on one engine." S&P alsostressed that central bank actions are having a diminishing impact on inflationand growth prospects, partly due to lack of support from governments and due tosome factors that are beyond their reach.

* U.S. and European banks are set to slash a further 1.7 million jobs inthe next decade amid a competition threat from financial technology companiesand technological developments that allow lenders to do more business online,the Financial Times writes, citing a Citigroup report. Ronit Ghose, oneof the authors of the report, predicted that the biggest cuts will happen incountries that have gone through a crisis or are "tech savvy."

* Berenberg observed that the alternative reinsurance market isincreasing its presence in Europe and could pose a threat to some reinsurers inthe region, Artemis writes. Berenberg said capital provision and risk underwritingare being "disaggregated" by new entrants in the reinsurance industryoffering alternative risk transfer mechanisms.


Co-opclose to naming head:Co-operative Bank Plcapproached Stephen Jones about the prospect of succeeding Niall Booker as CEO,Sky News reports. Jones, who previously served as CFO, has notyet accepted the position and Co-op Bank's board could still name a differentperson to succeed Booker.

* Royal Bank of ScotlandGroup Plc and RoyalBank of Scotland Plc yesterday invited holders of certain dollar-,pound- and euro-denominated notes to tender their securities for cash. The aggregateprincipal amount outstanding for the dollar-denominated notes is $2.95 billion,while the aggregate principal amounts outstanding for the pound- andeuro-denominated notes are £719.5 million and €3.14 billion, respectively. Theoffers will end April 6. Separately, RBS said it completed the pricing of $1.50 billion in10-year, 4.80% senior notes due 2026.

* Berenberg analysts said Lloyds Banking Group Plc is most exposed to"potentially larger stress test losses" under the U.K. downturnscenario of the Bank of England's stress tests due to its large domestic marketshare and recent consumer credit growth, CityA.M. writes. In contrast, Asia-focused and could farebetter in the 2016 stress test than in previous tests.

* Fitch Ratings said Flood Re will have a limited effect on theratings of nonlife insurance companies in the U.K. due to their size andbusiness/geographic diversification. The rating agency said thegovernment-backed flood insurance scheme, which begins next month and will befunded by an industry levy of £180 million, will make home insurancetemporarily affordable for policyholders but will not cut flood risk in thelong term.

* New complaints data published yesterday by the U.K. Financial ConductAuthority showed that financial services firms received 2.11 million newcomplaints during the second half of 2015, representing a decrease of 1.4%compared to the previous half. Excluding payment protection insurance, thenumber of complaints in the second half of 2015 amounted to 1.17 million. PPIremained the most complained-about product, followed by current accounts. CityA.M. and the FinancialTimes havereports.


CEO change at HSH:Constantin von Oesterreich, CEO of HSH Nordbank AG, will step down from his post and handover the reins to Stefan Ermisch, currently deputy CEO and CFO of the bank,Manager Magazin writes.

* Twint, the mobile payment application of , and Paymit, itscompetitor developed by UBS GroupAG, ZürcherKantonalbank and SIXGroup AG, are considering a merger to join forces against Apple Pay,a new entrant in the Swiss mobile payment market, Handelszeitung writes.

* Deutsche Bundesbank chief Andreas Dombret said theprobability that German banks will start charging negative interest rates onretail customer accounts is increasing, given the current negative interestenvironment, Der Spiegel reports.He added that bank customers should prepare for rising fees for bankingservices, including cash withdrawals, and also warned of a property bubble asmortgage lending has increased to a "worrying" extent in the recentpast.

* UBS Switzerland AG, the new Swiss unit of UBS Group launchedin April 2015, recorded client money outflows of CHF17 billion, mostly"cross-border wealth management assets," by the end of last year, Handelszeitungreports.

* UBS Group, through Jersey-based financing unit UBS GroupFunding, issued three hybrid bonds with a combined face value of $5 billion,Reuters notes.

* Deutsche BankAG unit Deutsche BankSecurities Inc. will pay $4.1 million in fines to the U.S.Financial Industry Regulatory Authority to settle allegations that it failed toproperly report data of options trades in the U.S., Reuters reports.


France tightensinsurance rules: French Finance Minister Michel Sapin drew up regulationsfor the insurance industry to protect clients and the financial stability ofthe country if an insurer fails, similar to the system put in place for banks, Les Echos reports.The measures are part of a larger package of finance-related laws he presentedto parliament this week. The law also contains a crackdownon online trading sites, responsible for €4.5 billion of fraudover the last six years, with currency trading and binary options beingparticularly targeted.

* Basel IV reforms proposed for banks will not take place,Banque de France Governor François Villeroy de Galhau told the French senate,saying his priority is to implement Basel III regulations before the end of theyear, Les Echos reports.

* Web payment specialist Dalenys, formerly Rentabiliweb, isin exclusive talks with another similarly sized company to create a jointventure in which it will have a majority stake to increase its presence intelephone and SMS payments, Les Echos reports.

* A survey by Dutch supervisor De Nederlandsche Bank showedthat insurers are still not doing enough to prevent violationof the Sanctions Act.


Sabadell not lookingat any more UK banks: Chairman JosepOliu said the lender does not currently intend to make any more acquisitions inthe U.K. after purchasing TSBBanking Group Plc last year, Reuters reports.

* Spain'sHigh Court yesterday said it will investigate whether Caja Madrid, which is nowpart of Bankia SA,systematically over-valued certain mortgaged properties between 2002 and 2007to issue bigger loans, Reuters reports. The probe would focus on former Caja MadridChairman Miguel Blesa and other former officials at the bank. A spokesman forBankia said it will not be affected by the case.

* AllianzGroup is looking to sell a $5 billion portfolio of life insurancepolicies in Italy and has picked Goldman Sachs to run the sale of the closedlife policies, Reuters writes.

* The Italian government isplanning to ask banks to help reimburse savers who lost money following thestate bailout of four small banks last year, an insider tellsReuters. Prime Minister Matteo Renzi had promised to compensate the savers, butusing public funds to do so could be a breach of European rules on bankbailouts. Meanwhile, MF writesthat Italian banks brought back to €300 million the endowment of the voluntaryfund created to bail out troubled lenders.

* Vittorio Malacalza, major shareholder of , is studying a planthat is alternative to the sale of nonperforming loans to Apollo, but the ECBis pressing and wants a new industrial plan by May, MF reports.

* Malacalza is studying the possible use of the stateguarantee on the securitization of NPLs as an alternative to the sale of BancaCarige's NPL portfolio. Other shareholders, including Gabriele Volpi and theSpinelli family, are against the Apollo offer, Il Sole 24 Ore writes,noting that a shareholders' meeting today will decide on the new board.

* UniCreditSpA, lead underwriter of the consortium of banks guaranteeingBanca Popolare di Vicenza SpA'scapital increase, is assessing whether the conditions to launch the transactionin the proposed end-April time frame are right, most dailies including MF write,noting that for now Popolare di Vicenza is sticking to the original plan.

* Shareholders of fund manager , including and Banca Popolare dell'EmiliaRomagna SC, are studying with their advisers Rothschild andMediobanca future plans for the asset manager, including a possible alliancewith a private equity group or with an industrial partner, MF writes,noting that the likelihood of an IPO seems remote.

* Davis & Morgan Merchant Bank is betting on the ItalianNPL market and named Hugh Malim, former Italy country chief at Barclays, itsnew president, Il Sole 24 Ore writes.

* Klaus Regling, managing director of the European Stability Mechanism,said yesterday that Cyprus' post-bailout economic restructuring has proved asuccess, though it will still need to tackle the high level of NPLs at Cypriotbanks, according to Reuters. Regling said NPLs inthe Cypriot banking sector were the highest in Europe, calling it "thesingle biggest issue" currently facing the island. Regling also saidCyprus will exit its three-year €10 billion bailout deal at the end of thismonth and used only 70% of the available funds.


Sweden set to raisebank tax: Swedish Finance Minister Magdalena Andersson said the countrywill introduce higher taxes on banks and other financial companies in 2017, Realtid reports.

* SpareBank 1Nord-Norge is closing 21 branches, Dagens Næringsliv reports.Most of the branches have been staffed by one or fewer employees, and no jobswill be lost. After the closures, the savings bank will have 38 branches in 35municipalities in northern Norway.

* Danske BankA/S currently has no plans to pass on the costs of the negativeinterest rates in Denmark to its private customers, Chairman Ole Andersen toldBørsen.


MKB finds buyers: Hungary's state-owned will be acquired by aconsortium of domestic and foreign equity funds, with the transaction pendingapproval from the Hungarian central bank's Financial Stability Council, Reutersreports, citing MKB Bank CEO Ádám Balog. Hungarian private equity fundMetis will buy a stake of between 40% and 50% in the bank, Luxembourg-basedfund Blue Robin Investments will also acquire between 40% and 50%, whileHungarian pension fund Pannonia will buy around 10%. The two Hungarian fundswill jointly own more than 50% but less than 60% of the bank.

* PAO Sberbankof Russia plans to shut or significantly trim its investmentbanking operations in London and New York, with the business suffering from westernsanctions imposed on Russia over the Ukrainian conflict, bne IntelliNews reports.

* Former Sberbank executive Alexander Dymov will beappointed new head of Vnesheconombank unit OJSC VEB-Leasing, Kommersantsays. Dymov willbe tasked with the evaluation of VEB-Leasing's bad assets and their sale aspart of VEB's strategy to divest noncore assets.

* The RussianDeposit Insurance Agency estimates that fraudulent bankers have stolen some 550billion rubles from collapsed banks to date, with more than 80% of bankfailures caused by criminal activities, Vedomostireports.

* Foreign shareholders reduced their participation in thecapital of Russian banks to 14.27% in 2015, Kommersantreports, citingcentral bank data. The rate has been falling since 2011, when it stood at24.62%.

* submitted arestructuring program for approval of the Polish FSA, Puls Biznesu reports.The bank also said it is working on a new strategy that will be made publicbefore the lender's general meeting of shareholders in April.

* The shareholdersof Bank BGZ BNP ParibasSA approved its upcoming merger with Sygma Bank, Puls Biznesu says.

* Polish President Andrzej Duda is working on a new Swissfranc mortgage conversion proposal, Reuters reports,citing Deputy Prime Minister Mateusz Morawiecki. The Polish FSA has previouslysaid that the current version of the presidential proposal would destabilizethe Polish banking sector.

* CEFC China EnergyCo. Ltd. will increase its holding in J&T Finance Group to 50% from around10%, the companies confirmed. The firms are interested in jointly providing retail bankingservices in central and eastern Europe, while J&T Banka also plans tolaunch operations in China. J&T Finance Group also said it signed acooperation agreement with China Development Bank on investing €800 millioninto various project. Reuters adds that J&TFinance and China's Ping An Bank agreed to set up a €5 billion fund to investin financial, energy and industry sectors.


* Japanese trust banks plan to levy surcharges on the moneythey take from institutional investors to compensate for the negative interestrate implemented by the Bank of Japan, TheYomiuri Shimbun reports.

* The average lending rate at Japanese banks fell to a newall-time low of 0.793% in February, TheMainichi Shimbun reports, citing datafrom the Bank of Japan.

* Confirming an earlier report, said it agreed toacquire GE Asset ManagementInc. from GeneralElectric Co. in a cash transaction with a total purchase price of up to $485million.


Scant hope forfull recovery of €4.9B Novo Banco bailout bill: Portugal hasalready abandoned one sale of Novo Banco because bids were less than it hopedfor. But with Portuguese bank valuations plunging, the odds of getting back the€4.9 billion poured into the Banco Espírito Santo "good bank" are noweven lower.

Data DispatchEurope: Retail, CIB and cost questions hang over trio of big Frenchbanks: Low interest rates and weak markets mean that satisfactoryreturns are eluding French banks such as BNP Paribas, Société Générale andCrédit Agricole SA.

UnprofitableDeutsche Bank faces multiple challenges: Deutsche Bank ChairmanPaul Achleitner has received the backing of the ruling family of Qatar, a movethat underlines the challenges facing the German bank.

Xana Kakoty, ArnoMaierbrugger, Brian McCulloch, Kees Pijnappels, Yael Schrage, PraxillaTrabattoni, Mike Hatzidakis, Esben Svendsen, Beata Fojcik and Ali Kayalarcontributed to this report.

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