Germany’s plan to order banks to separate some of their riskiest businesses from deposits to protect clients could serve as a model for Europe, Finance Minister Wolfgang Schaeuble said.
Starting in 2017, German banks must supply capital and funding for proprietary and high-frequency trading operations as well as some business with hedge funds. The law stops short of ordering banks to split off trading on behalf of clients, as suggested by a panel led by Bank of Finland Governor Erkki Liikanen which advised the European Commission on its proposals.
The commission set a provisional date of Jan. 29 to publish a draft law on bank structure, Chantal Hughes, a spokeswoman for Michel Barnier, the EU’s financial services chief, wrote in an e-mail to Bloomberg News today.
“I assume that, as with our German bank split law, the European rule won’t threaten the financing of the real economy through the proven universal banking model,” Schaeuble said at an event near Frankfurt hosted by Deutsche Boerse AG, the operator of the city’s stock exchange.
Schaeuble was seated at a table with Commerzbank AG Chief Executive Officer Martin Blessing and Deutsche Bank AG supervisory board Chairman Paul Achleitner as well as European Central Bank President Mario Draghi, Bundesbank President Jens Weidmann and Deutsche Boerse CEO Reto Francioni.
Deutsche Bank and Commerzbank are so-called universal banks with investment- and retail banking operations under one roof.