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10 February 2014

Graham Bishop: Diluted 'Liikanen' - The Commission proposal on bank restructuring

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Finally… the Commission came forward with plans to re-structure Europe's banking sector after taking "into account the useful report by the High Level [Liikanen] Group". Is that 'faint praise'?

(NOTE: A shorter version of this article will appear in 'Financial World' in March.)

The target was only the biggest and most complex banks and the plan is to stop them from engaging in the risky activity of proprietary trading.

For Commissioner Barnier, the stinging criticisms generated by this proposal were a sign it is pitched just right, hitting the perfect “point of balance” between US, UK, French and German initiatives to structure banks. “I’m not surprised by the reactions", he said. “Have you ever seen any of my proposals welcomed with enthusiasm by the financial sector?” “These banks continue to engage in risky market activity that turns a profit but does not serve their customers. Is that proper? I say no.”

Was this Commissioner Barnier’s 'swansong'? He may not gain the EPP nomination for Commission President at its March 6/7 'primary' but he appears committed to stand down from the Commission and campaign as a candidate for the European Parliament. At the least, this proposal should give him some tub-thumping sound-bites for the campaign.

Please click on the PDF link below to continue reading.

© Graham Bishop

Documents associated with this article

Liikanen diluted.pdf

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