The following Financial Services guidance note provides comprehensive and up to date legal information covering:
This Practice Note provides a summary of work carried out by the European Commission's High-Level Expert Group (HLEG). The HLEG was set up in February 2012 to consider possible structural reforms to the EU's banking sector. Erkki Liikanen, Governor of the Bank of Finland was appointed chairman. The HLEG’s mandate was to determine whether financial stability, efficiency and consumer protection would be assisted through implementing structural changes as well as ongoing regulatory reforms. The HLEG held a consultation between 3 May and 1 June 2012 and presented its final report, known as the Liikanen Report, to the Commission on 2 October 2012.
The Liikanen report made the following proposals:
disaster management—additional separation for recovery and resolution
diversification of assets for bail-in
improving corporate governance to deliver more effective risk management
Each of these is discussed in greater detail below.
The proposal for ring-fencing called for the segregation of retail banking (eg deposits and provision of services to the non-financial services sector) and trading activities (such as proprietary trading and market making). Trading would need to be carried on within a separately capitalised entity. This would not require complete separation—it would allow for a universal banking structure, with trading carried
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