Liikanen review 'leaning towards European ringfencing'

10 September 2012

Major European banks may have to ringfence their trading assets under the terms of new proposed regulations in the financial industry.

That is according to people with knowledge of the ongoing Liikanen review who have told the Financial Times that experts are leaning towards recommending similar structural reforms as those seen in the UK and the US.

The Liikanen review - a full-scale analysis of the continent's lending sector - was established last November by European Union commissioner Michel Barnier and the 11 officials overseeing the project met in Brussels to discuss their plans last week.

It is thought the panel is making good headway towards establishing a unanimous consensus, with at least seven members indicating their support for a trading ringfence.

However, one specialist is "firmly against" the implementation of structural changes, meaning a compromise agreement of enforcing ringfencing if a bank comes close to collapsing could be settled on.

By Gary Cooper

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