RETAIL BANKING | Staff Reporter, Singapore

Weekly Global News Wrap Up: Barclays to pay $2b fraud fine; Should Deutsche Bank reduce its US business?

And US Treasury supports easing raps on banks not lending to the poor.

From Reuters: Barclays will pay $2 billion to settle claims for billions of dollars of losses suffered by investors who bought toxic mortgage-backed securities in the run-up to the 2007 financial crisis, the U.S. Justice Department said on Thursday. The British bank denied misleading investors about the quality of the mortgage loans backing the instruments and allegations it committed mail fraud and bank fraud.

From Bloomberg: Deutsche Bank AG needs to scale back its U.S. operations and focus on serving European companies to unlock capital and improve returns, according to analysts at JPMorgan Chase & Co. The U.S. business “consumes material balance sheet resources” while suffering from “persistently low profitability,” Kian Abouhossein and Amit Ranjan wrote in a note to clients on Wednesday. The alternative would be to do nothing and hope for a better environment, which would leave the bank at risk of a “confidence issue” should markets go the other way, they said.

From Reuters via CNBC: U.S. regulators should relax penalties for banks that fail to meet their obligation to lend to low-income communities, according to recommendations released by the Treasury Department on Tuesday. Under the decades-old Community Reinvestment Act (CRA), banks must promote financial inclusion by extending mortgages and other types of credit to low-income communities where they take deposits. Lenders that fall short face limits on opening new branches and otherwise growing their business.

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