Brussels, 17/01/2014 (Agence Europe) - The European Commission will over the next few weeks be publishing the final item of legislation to make banks more solvent, a proposal to prevent banks from becoming too big to fail.
On Friday 17 January, Chantal Hugues, spokeswoman for EU Internal Market Commissioner Michel Barnier, said that he would be publishing a proposal in the next few weeks, hopefully in January, on the Liikanen Report on the structure of banks, as the final item in the legislative armoury, to ensure banks cannot become too big to fail (see EUROPE 10990).
Bloomberg reports that the largest banks in the European Union would face a “narrowly” defined ban on proprietary trading from 2018. Regulators would also have until then to gauge whether some banks should split off their trading activities into separately capitalised units. The draft plan includes measures to boost transparency in the market for securities financing transactions, such as repurchase agreements, or repos.
The proposal on the structure of banking has been postponed several times. Commissioner Barnier's flagship legislation will not upset the European banking model (see EUROPE 10950), but aims to strike a balance between measures introduced in Germany, France and the United Kingdom, along with rules being prepared in the United States, to ensure European banks remain competitive. (MB/transl.fl)