20 November 2013

Handelsblatt: EU's Barnier to propose law separating bank activities

Translated from the German

EU Internal Market Commissioner Michel Barnier is sticking to his plan to force banks to separate risky lines of business within their organisational structure. "I'm going to present the relevant bill before the end of the year", he told journalists from the Handelsblatt and other European newspapers.

He thus replied to speculations that the EU legislative initiative separating banking activities may no longer be on the table before the European elections in May 2014. "Anybody who thinks that I am not active in this field is wrong", Barnier said.

A starting point for Barnier's draft proposal is the report of an expert group headed by the Finnish central banker Erkki Liikanen. She had recommended that banks differentiate their current risky trading divisions from their deposit and loan business in-house.

Barnier cited several reasons why he considered this EU law to be required urgently: first of all, different national banking separation legislations could undermine the EU's Single Market. Germany and France have already passed such laws, Belgium and the Netherlands are in the process of preparing them. "We must be careful that the national legislations do not differ too much from each other so that a level playing field for banks is safeguarded", Barnier said.

The Commissioner further indicated that he considers national legislation to be insufficient. "Maybe my text will go further than certain national laws", he said, adding "we must fight speculative activities effectively".

Full article (in German)

© Handelsblatt