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EU money-laundering shortcomings; TSB Pester's £1.7M in spotlight

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EU money-laundering shortcomings; TSB Pester's £1.7M in spotlight

* A confidential report by European Union regulators has revealed shortcomings and gaps in the bloc's anti-money laundering measures, the Financial Times reported.

* ECB Governing Council member Vitas Vasiliauskas believes all big EU banks should be jointly supervised by local authorities and the ECB, even if they are not headquartered in the eurozone, Reuters reported.

* Governors of the central banks of Finland, Spain, Lithuania and the deputy governor of the French central bank renewed calls to European governments to establish the long-delayed European Deposit Insurance Scheme, after EU leaders failed to reach an agreement on the matter in June, Reuters reported. The project, which faces opposition from Germany and the Netherlands, is designed to cover savers up to €100,000 in the event of a bank collapse.

* The EU could offer new guarantees to the U.K. to win its support for a deal that avoids an Irish border dispute following Brexit, Reuters reported, citing a leading EU lawmaker.

* The persistent abundance of traditional and alternative capital is likely to be a big talking point at the upcoming reinsurance Rendez-vous in Monte Carlo.

UK AND IRELAND

The Bank of England's Mark Carney appeared to confirm reports he was willing to stay on as the institution's governor, but said the decision would be left to the Chancellor of the Exchequer. The Canadian national originally signed up for a five-year term rather than the standard eight years.

* TSB Banking Group PLC CEO Paul Pester is stepping down from his post amid IT woes at the British lender, and nonexecutive Chairman Richard Meddings will become interim executive chairman. The bank faces a possible backlash over the decision to hand Pester £1.7 million as he departs, The Times noted.

* Five individuals were handed a combined sentence of 17.5 years in prison for their involvement in a boiler room share fraud in the U.K., which was the Financial Conduct Authority's second-largest ever criminal prosecution. The fraud resulted in losses of more than £2.8 million for investors, the FCA noted. The fraud's mastermind Michael Nascimento has yet to be sentenced.

* Certain private equity funds advised by Sabre Insurance Group PLC's former owner, BC Partners, and founder Angus Ball, completed the sale of 44,757,377 ordinary shares of the U.K. motor insurer, raising gross proceeds of £116.4 million.

* Standard Life Aberdeen PLC increased its stake in Phoenix Group Holdings to 26.94% from 8.71%, according to a market filing.

* The Irish central bank called on asset management companies to provide written confirmation that they have reviewed their existing methodologies for the calculation and payment of performance fees, after the regulator identified that in some instances the fees were not calculated in accordance with its guidance.

GERMANY, SWITZERLAND AND AUSTRIA

* Deutsche Bank AG will drop out of the Euro Stoxx 50 index on Sept. 24, the German lender confirmed to the Financial Times. The move reflects the decline in the Frankfurt-based banking group's market capitalization, which has dropped 30% to €20 billion in 2018.

* Germany's Munich Re Co. is acquiring relayr Inc. in a deal that values the Boston technology company at $300 million, subject to regulatory approvals.

* Germany's financial market supervisor BaFin is screening Iran-focused, Hamburg-based Europäisch-Iranische Handelsbank AG to check for involvement in terrorism financing or money laundering, Süddeutsche Zeitung wrote. Faced with the scrutiny, the bank refrained from a planned transfer of €300 million to Tehran, the paper noted.

* Insurers Provinzial Rheinland Konzern and Provinzial NordWest Konzern agreed on a merger into a new group with combined premium volume of €6 billion, Handelsblatt wrote.

* Liechtenstein-based VP Bank AG will conduct business in Singapore through a branch instead of a wholly owned subsidiary, after upgrading its license in the country to a wholesale banking license from a merchant bank license, effective Sept. 1.

FRANCE AND BENELUX

* BNP Paribas SA's Luxembourg unit, BGL BNP Paribas SA completed the purchase of the entire outstanding shares in ABN AMRO Bank NV's ABN AMRO Bank (Luxembourg) SA and its fully owned subsidiary ABN AMRO Life SA, following regulatory approval.

* BNP Paribas Fortis SA could close as many as 50 branches in Belgium in 2019, according to l'Echo. Since the beginning of 2015, the bank has closed 11 branches, or one branch out of 8, the publication noted.

* Scor SE rejected an acquisition offer from SGAM Covéa after determining that it reflected "neither the intrinsic value nor the strategic value" of the company. The French reinsurer also denied a news report that it has been in discussions about merging with fellow reinsurer PartnerRe Ltd.

SPAIN AND PORTUGAL

* A Supreme Court judge has decided to prosecute a group of former employees of Caixanova, including former president Julio Fernández Gayoso, for corporate crime and money laundering in the granting of a loan to a company linked to former managers that caused an €80 million loss, wrote Expansión.

ITALY AND GREECE

* Banca Monte dei Paschi di Siena SpA has begun sending investors teasers for the disposal of a €2.5 billion portfolio of unsecured nonperforming loans and has also begun the process to sell €1.1 billion in unlikely-to-pay loans, Il Sole 24 Ore reported.

NORDIC COUNTRIES

* Denmark's government is considering implementing stricter rules to combat financial crime, within the framework of goals set by the EU, ensuring banks' top management are accountable for misdemeanors anywhere in an organization, including the lenders' international units, Bloomberg News reported.

* The Danish financial services regulator has criticized the largest Danish banks for being too lenient when extending large mortgages to customers with questionable finances in cities like Copenhagen and Aarhus, Børsen reported.

EASTERN EUROPE

* The Warsaw Stock Exchange, or Gielda Papierów Wartosciowych w Warszawie SA, is in talks with other stock exchanges from central Europe to create a joint index of companies from the region, Rzeczpospolita reported. A letter of intent on the matter could be signed in October or November.

* Alior Bank SA joined the list of potential investors interested in acquiring Société Générale SA's Polish unit Euro Bank SA, Puls Biznesu wrote, adding that until now Bank Millennium SA has been the leading candidate to buy the lender.

IN OTHER PARTS OF THE WORLD

Asia-Pacific: Tokyo Century may raise Indonesian bank stake; Philippines OKs Axa/XL Group deal

Middle East & Africa: Citigroup snaps up Leumi stake; South Africa slips into recession

Latin America: Venezuela ups reserve requirements for banks; merger of 2 Panama banks completed

North America: Wells probing gender bias claims in wealth division; NCUA liquidates Melrose CU

Global Markets: Rand slides as South Africa faces recession; Bank of England chief in limelight

NOW FEATURED ON S&P GLOBAL MARKET INTELLIGENCE

Excess capacity in spotlight as reinsurance industry prepares for Monte Carlo Rendez-vous: The persistent abundance of traditional and alternative capital is likely to be a big talking point at an important, and opulent, meeting in Monaco.

The big rating agencies have all published their outlooks for the reinsurance sector ahead of the gathering.

The global reinsurance industry has reached a 'new normal' of lower, but less volatile, shareholder returns, prompting a stable outlook, Fitch says.

S&P Ratings predicts that as 2018's price increases run out of steam, reinsurers' profitability will barely exceed their cost of capital this year and next.

Moody's says reinsurers are stable and well-capitalized but, like S&P, forecasts more M&A action as firms seek to build scale, diversify and remain competitive.

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

Ben Meggeson, Arno Maierbrugger, Danielle Rossingh, Esben Svendsen, Beata Fojcik, Heather O'Brian, Stephanie Salti, Sophie Davies and Helen Popper contributed to this report.

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