Sept 21 (Reuters) - European stocks headed lower for a third straight session on Monday, hit by worries about a surge in coronavirus cases in the continent and a slide in HSBC and Standard Chartered following reports alleging the UK lenders of moving illicit funds.

The pan-European STOXX 600 fell 1.0% in early deals, with the Britain's banking-heavy FTSE 100 down 1.6%.

Asia-focussed lender HSBC fell 3.2% to its lowest since March 2009 and Standard Chartered dropped 2.9% after BuzzFeed and other media reports said that they and other banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.

Meanwhile, a report from China's state-run Global Times suggested that HSBC could be a possible candidate for inclusion in the country's 'unreliable entity list' that targets foreign firms which violate Chinese laws or commit "illegal acts". (https://bit.ly/33Ocrpp)

Europe's banking sector, already down about 40% this year, fell 2.2%.

New coronavirus-led restrictions in Spain and other European countries and news that British Prime Minister Boris Johnson was pondering a second lockdown in Britain sent Europe's travel and leisure index down 2.5%. (Reporting by Sruthi Shankar in Bengaluru)