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French Finance Minister Pierre Moscovici said the banking law he will present this month will be “more pragmatic” than proposals for the euro area set out by a group led by Bank of Finland Governor Erkki Liikanen.
“We want something more practical to distinguish between speculation and what’s useful for the economy,” Moscovici told a committee of the European Parliament in Brussels today. “We have a strong banking industry, with universal banks that provide 4,000 jobs. We haven’t decided to break this model.”
Under the French plan, speculation through high-frequency trading and on agricultural-commodities derivatives would be banned. The bill seeks to prohibit “pure proprietary trading that allows” banks “to speculate with their balance sheets, unless they are very strictly ring-fenced,” Moscovici said last month.
Liikanen’s Oct. 2 report recommended a “legal separation of certain particularly risky financial activities from deposit- taking banks within the banking group.”
The European Union report found that Paris-based BNP Paribas SA (BNP) and Societe Generale SA (GLE), together with Barclays Plc of London, Frankfurt-based Deutsche Bank AG and Royal Bank of Scotland Group Plc of Edinburgh had the highest proportion of trading assets, accounting for more than 30 percent of total assets.
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