RETAIL BANKING | Staff Reporter, Singapore

Weekly Global News Wrap Up: German government reportedly open to Deutsche-Commerzbank merger; Tighter money laundering rules set for Danish banks

And should the US mimic the UK's morgage curbs?

From Bloomberg: The German government is said to be open to a merger between the country’s two biggest listed banks, a magazine report said Tuesday. 

German Finance Minister Olaf Scholz “could envisage” a tie-up between Deutsche Bank AG and Commerzbank AG, Spiegel reported, adding that Deutsche Bank Chief Executive Officer Christian Sewing and Commerzbank CEO Martin Zielke are also open to the idea. 

Zielke and Sewing have both repeatedly said that consolidation should happen, although they have been less clear on what their banks’ own roles should be in that process. Sewing said in June that the time is not ripe yet, at least as regards cross-border deals.

From Bloomberg: As of October, Danish banks will be expected to live up to new guidelines that entail a continual review of risks across all levels of their organization, including systems of governance right down to individual customer accounts after allegations that its biggest bank was a central pipeline for channeling billions in illegal funds across Europe. 

Danske is now the target of criminal investigations in Denmark and Estonia. The allegations point to as much as $9 billion in dirty money, mostly from Russia, making its way through the bank’s Estonian branch between 2007 and 2015.

From CNBC: The United States should deploy tools to curb unwise mortgage lending and banks’ excessive risk-taking, similar to those used by the Bank of England, former Federal Reserve Vice Chairman Donald Kohn said on Friday.

“Global financial stability would be better assured ... if more jurisdictions, including the U.S., adopted a more active use of the counter-cyclical capital buffers, making sure that banks and other intermediaries retained enough capital in the upswing now going on to safeguard their ability to deliver essential services at reasonable prices in the next downswing,” he said. 

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