Barnier panel to look at Vickers for EU
Friday 25 November 2011 - by Andrew.Hickley@gfsnews.com
A commission source told Global Financial Strategy that the committee will analyse the benefits of "moving from differentiation, to segregation and to separation" of banking activities.
"Whether at this stage we could think of it as the model for the rest of Europe, we don't know right now.
"We're willing to look at whether there are things to take from it or lessons to be learned."
In addition, provisions of the US Volcker Rule will be examined, they added, labelling the possible proprietary trading ban as "equally interesting".
If the Vickers model were to be implemented, questions remain about the whether the ring-fenced retail bank would have to pay for losses of the investment bank, and whether capital requirements could be lowered for retail banks that are taking less risk, the source added.
Details of the committee emerged during Michel Barnier's appearance earlier this week in front of the European Parliament. The source confirmed that the committee will consist of a "handful" of members from different sectors, and it will be expected to consult widely before issuing a final report either in late spring or early summer 2012.
Barnier is "not calling into question the universal banking system per se" but the committee will explore if there are better ways to isolate against risks, the source added.
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