Finance Watch response to EC consultation on banking structure

11 July 2013

Finance Watch published its response to the EC's consultation, calling for an ambitious reform of the structure of banks in Europe.

The key points from Finance Watch's response include:

• Separation will render banks more resolvable in the heat of a crisis.
• A strong EU proposal will avoid "a race to the bottom" via weak national initiatives.
• Market-making and underwriting are trading activities and should be separated from deposit-taking, along with other capital market activities.
• The private costs of bank structural reform will bring large social benefits by limiting the cost of future banking crises and reducing the economic distortions caused by bank funding subsidies.
• Ex-ante bank separation is necessary to achieve the goals of bank structure reform; separation cannot be left to the discretion of national supervisors.
• The Commission's Option E (HLEG) is the minimum approach to be considered, and Options H and I, where all trading activities are separated from a narrow deposit-taking entity, are the preferred approaches from a public interest point of view.

Press release

Please click on the link below to read the full response.

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