Stock Banking Special

European bank stocks including Deutsche Bank’s slide after money-laundering allegations

Shares of Europe’s top banks dropped on Monday, after the publication of reports alleging they kept doing business with customers they suspected of money laundering and other wrongdoing.

Published

3 years ago

22 Sep, 2020

The Business Nepal

Signage for HSBC (L) and the Standard Chartered Bank (R) are displayed on the local headquarters of each bank in Hong Kong on April 28, 2020.

The report, led by BuzzFeed News and including other media outlets around the world, was on the basis of what are called suspicious activity reports filed by the banks to the U.S. Treasury, that had been gathered for Congressional investigators to look at President Donald Trump’s 2016 campaign. The banks by law aren’t allowed to comment on the SARs they file.

Deutsche Bank DBK, -8.75%, Standard Chartered STAN, -5.81%, Barclays BARC, -5.39%, Commerzbank CBK, -5.42%, Danske Bank DANSKE, -2.89% and HSBC Holdings HSBA, -5.26% were all named in the report, as were several U.S. banks. Deutsche Bank shares fell 9% after it accounted for a majority of the suspicious activity reports in the BuzzFeed trove, and allegedly, Bank of America appealed to Deutsche Bank’s chairman at the time to take action.

HSBC closed at its lowest level since Oct. 5, 1998.

The broader Stoxx Europe 600 SXXP, -3.24% fell 3.2%, and the major regional indexes were slammed too. The German DAX DAX, -4.37% fell 4.4%, the French CAC 40 PX1, -3.73% fell 3.7% and the U.K. FTSE 100 UKX, -3.37% lost 3.4%.

U.S. stocks SPX, -1.15% opened lower as well.

The death of Supreme Court associate justice Ruth Bader Ginsburg may have market implications, as what is expected to be a hotly contested nomination battle for her replacement could further roil Washington, D.C., which has yet to agree on a new stimulus package or funding beyond the end of September.

“The fight between the President and Congressional Democrats on whether to fill the vacant seat now or wait until after the election is expected to lead to more delays in reaching a middle ground on a new fiscal package. Hence, we would expect that the much-needed stimulus will be pushed back until after the U.S. elections,” said Hussein Sayed, chief market strategist at FXTM.

Travel stocks in Europe were pressured on worries over the region locking down in response to a new wave of coronavirus cases. U.K. Prime Minister Boris Johnson will address the House of Commons on Tuesday to discuss COVID-19. British Airways owner International Airlines Group IAG, -12.07% tumbled to an eight-year low, and Ryanair Holdings RYA, -4.55% also fell sharply