French banks set to be ring-fenced

3 October 2012

Banks in France are set to have their retail and investment divisions separated before the end of the year, it has emerged.

During an interview published in Le Parisien today (3 October), the country's finance minister Pierre Moscovici has indicated the government in planning to put forward sweeping reforms for the banking industry in the coming months, Reuters reports.

Prior to his election as president earlier this year, Socialist candidate Francois Hollande made banking ring-fencing one of his primary objectives and Mr Moscovici has insisted these changes will go ahead sooner rather than later.

While admitting the administration will not look to deviate from France's current "universal bank model", the minister noted policymakers will be "merciless with excess".

"I don't want a feeble reform - I want banks to be at the service of the real economy," he added.

Mr Moscovici went on to say that officials want to establish a new system whereby activities deemed beneficial to the economy are kept away from speculative practices.

By Tony Aynsley

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