Bloomberg News

German Ministry Open to Discuss Separation of Investment Banking

October 17, 2011

Oct. 17 (Bloomberg) -- Proposals to separate investment and retail banking are “interesting approaches” for international talks about financial-market regulation, German Finance Ministry spokesman Johannes Blankenheim said.

“These ideas, these suggestions should be discussed intensively at the international level, especially to solve open questions such as the definition of the retail and investment business and the repercussions on the real economy,” Blankenheim said when asked by reporters today in Berlin about demands by Germany’s opposition Social Democratic Party to impose a separation.

Bjoern Saenger, a lawmaker from Chancellor Angela Merkel’s Free Democratic Party pro-market coalition ally, said in an e- mailed statement he welcomes the ministry’s readiness to discuss a separation and is looking forward to any proposals.

The debate in Germany comes after the U.K. government decided to force lenders to insulate their consumer-banking units by 2019 as Chancellor of the Exchequer George Osborne seeks to shield customers and taxpayers from another financial crisis.

Protest movements such as Occupy Wall Street, which spread to four continents this weekend including demonstrations in Germany, are raising pressure on politicians to shield banks from taxpayer-led bailouts seen during the 2008 financial crisis.

--With assistance from Aaron Kirchfeld in Frankfurt. Editors: Leon Mangasarian, James Hertling.

To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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