Deutsche Bank is planning to reduce its securitization business, and perhaps its mortgage business altogether

From Reuters:

Deutsche Bank is looking to cut its loan securitization business further starting with repackaged U.S. mortgages, two people familiar with the matter said, as the lender braces for a large fine in the United States for alleged mis-selling of such debt.

A final decision about this core business is set to come early next year, the people said, and securitization cutbacks could become a central part of an expected strategic overhaul at the bank, once U.S. authorities have settled on a penalty.

“We have already shrunk the business over the last two to three years,” a person with direct knowledge of the bank’s plans said. “It could shrink a lot more. Not only sales and trading, but also in origination.”

Federal Reserve Tightens Rules Addressing Alleged “Revolving Door” With Wall Street

The Federal Reserve said it has expanded its curbs on bank supervisors departing for private practice, moving to address criticisms of an alleged “revolving door” between the regulator and Wall Street.

The central bank’s new measures, which apply solely to supervision employees, are designed to tighten the restraints it poses on officials leaving for financial institutions and to “promote consistency in post-employment ethics rules” across the system, the Fed said.

The Fed already had a one-year cooling-off period for senior officials leaving the Fed and accepting paid work from a financial institution for which they had primary responsibility in their last 12 months at the central bank. That rule applied primarily to officials who were “central points of contact” as key supervisors of firms with more than $10 billion in assets.

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Citigroup (C) to Sell Subprime Lending Unit in Canada

Citigroup Inc. (C – Free Report) entered into an agreement to sell CitiFinancial, its subprime lending unit in Canada, to an investor group led by private investment firm, JC Flowers and Värde Partners.

This is part of Citigroup’s strategy to emphasize on growth in core businesses through restructuring, expense management and streamlining operations internationally.

The divestiture is subject to regulatory approvals and is anticipated to close in the first half of 2017. While the amount for the sale remained undisclosed, this transaction is not likely to affect Citi’s financials.

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