Banking structural reform


Banking structural reform: Council agreed its position regarding the structural reform of the banking sector

June 2015

By protecting the deposit-taking business of the largest and most complex EU Banks from potentially risky trading activities, the aim of this proposal is to enhance financial stability.

The proposed regulation would only be binding for banks that are either deemed of global systemic importance or exceed certain thresholds regarding their size (global systemically important institutions, in accordance with directive 2013/36/EU on capital requirements) or trading activities (entities with total assets of at least €30billion over the last three years and trading activities of at least €70 billion or 10% of their total assets).

The draft regulation is intended to:

  • reduce excessive risk taking
  • avert fast balance sheet growth, as a result of trading activities
  • protect institutions providing activities that deserve a public safety net from losses incurred as a result of other activities
  • provide for the mandatory separation of proprietary trading.

Trading activities other than proprietary trading would be subject to a risk assessment.

The regulation requires a qualified majority for adoption by the Council, in agreement with the European Parliament.

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