Citi CFO to retire; Dutch bank hit with big AML fine

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Take a bow: Citigroup announced the retirement of its long-time chief financial officer John Gerspach following a 10-year run that began “when Citigroup was a poster child for the financial crisis,” the Wall Street Journal commented. He will be succeeded next March 1 by Mark Mason, CFO of the bank’s Institutional Clients Group, which includes investment banking and trading.

Two other senior Citi executives are also leaving: Jim Cowles, head of its Europe, Middle East and Africa group, and Bill Mills, its North America chief executive. Both are leaving at the end of this year.

Record AML fine: ING, the largest bank in the Netherlands, agreed to pay a record European fine of €775 million ($899.8 million) to settle Dutch charges of failing to stop rampant money laundering by its clients.

Dutch prosecutors said bank “clients were able to use accounts held with ING for criminal activities for many years, virtually undisturbed” from 2010 to 2016. Moreover, the activities “took place in such a way that the bank is also accused of culpable money laundering” because it failed to prevent bank accounts held by its clients to launder hundreds of millions of euros. The bank said it had begun disciplinary procedures against 10 or so current and former employees.

Separately, an independent probe into the money-laundering scandal at Danske Bank, Denmark’s largest bank, found that about $30 billion of Russian money was parked at the bank’s Estonian branch at any given time in 2013, the peak year of the scandal that lasted from 2007 until 2015. The findings “raise questions for Danske’s leadership about who knew, and when, about the sheer volume of foreign money passing through its small Estonian branch.”

“It’s a truly breathtaking amount for such a small branch. You can’t have that amount flowing through without it raising questions,” a person close to the investigation said.

A report by the European Union blames the rash of money laundering scandals on “shortcomings with respect to co-operation and information-sharing, both at the domestic level between different authorities and across borders in other EU member states.”

Double whammy: High home prices and rising interest rates are putting a damper on the U.S. housing market, which is hurting business at mortgage lenders.

But there’s hope for at least one part of the market. The Self-Employed Mortgage Access Act would make it easier for lenders to approve self-employed borrowers and those who work in the gig economy.

Wall Street Journal

No exit before Brexit: Bank of England Gov. Mark Carney told a parliamentary committee that he is willing to stay on past his scheduled departure date next year to provide “a measure of stability” as the U.K. prepares to leave the European Union. “I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England,” Carney told the Treasury Committee.

Carney’s continued presence could be critical, as “London faces an existential moment as Europe’s capital of capital.” Not only is its “preeminence as a global financial center … at stake,” but the city “is a divided place, with sometimes diametrically opposed views over how the world of money should handle Brexit.

Financial Times

One better than two?: Deutsche Bank and Commerzbank “have been the two most powerful destroyers of shareholder value among German blue chip” companies over the past 10 years. “Yet the chatter about industrial policy and the creation of European champions signals that Berlin is warming up to the idea of eventually merging” the two wounded giants.


Extra time: Federal regulators have extended by an extra 30 days, until October 17, public feedback on their proposals to revise the Volcker Rule on proprietary trading by banks. “The banking industry is airing concerns with regulators about efforts to fix” several parts of the rule, Reuters said.


“Our recent successes in such important areas as stress tests, living wills and ongoing progress towards our financial targets are due in large part to his leadership. He has represented our company exceptionally well, not just in good times but in tough ones as well.” — Citigroup CEO Michael Corbat, announcing the retirement of long-time bank CFO John Gerspach.

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