UPDATE 1-Market Chatter -- Corporate finance press digest

(Adds one item at the top)

LONDON, Dec 1 (Reuters) - The following corporate finance-related stories involving U.S. and European companies were reported by media on Sunday and Monday:

* Amlin (AML.L), the FTSE 250 insurer, is working on plans to create a new syndicate at Lloyd's of London funded entirely by private investors, the Daily Telegraph said.

* Struggling Citigroup Inc (C.N) plans to sell NikkoCiti Trust and Banking Corp, its trust bank unit in Japan, as part of its global restructuring efforts in a deal that could raise up to 40 billion yen ($420 million), Japanese media reported. [ID:nT210631]

* A report in the Sunday Times that Microsoft Corp (MSFT.O) is in talks with Yahoo Inc (YHOO.O) to buy the U.S Internet company's online search business for $20 billion is "total fiction," according to a key executive cited by the AllThingsDigital blog, affiliated with the Wall Street Journal. [ID:nLU136986]

* British airline Flybe is in talks to buy British Midland's subsidiary operations bmi regional and bmi baby, the Mail on Sunday reported. The two airlines are not core to the strategy of British Midland's new owner, Lufthansa (LHAG.DE), it said. [ID:nL0124065]

* Small and medium-sized German car parts makers that rely on house banks for capital could collapse if they do not find access to financing soon, executives in the automotive industry are saying, according to the German media. [ID:nLU115594]

* Barclays Capital has embarked on a drive to build a global equities operation to try to re-establish its position in a business it abandoned a decade ago, the Financial Times said.

(Compiled by Olesya Dmitracova; Editing by Rupert Winchester)