Societe Generale SA Chief Executive Officer Frederic Oudea said a European Union bill on separating banks’ investment and consumer operations comes too late in the regulatory process and would now do more harm than good.

“Bank structural reform is a subject on which we’re sounding the alarm,” Oudea told reporters in Brussels on Oct. 13.

Oudea, who is also head of the European Banking Federation, said the region’s banks would be less competitive if forced to split their activities when U.S. banks have been allowed to preserve an integrated structure combining retail and investment activities. “In this world of fierce competition, we need to be on a level playing field with our American counterparts,” he said.

The EU bill on bank structural reform is mired in the European Parliament, whose two largest political groups -- the European People’s Party on the center-right and the Socialists and Democrats on the center-left -- have locked horns over the crucial question of when authorities can order a lender to split off trading activities from consumer services.

The parliament needs to adopt a negotiating position on the legislation so compromise talks can begin with the EU’s 28 member states on a final text.

Some countries, notably the U.K., have pressed ahead with bank-structure laws in the absence of EU rules. The Bank of England will begin a public consultation tomorrow on prudential requirements as it moves to implement the so-called Vickers rule, which requires the ring-fencing of core retail operations.

Oudea said the EU bill, part of an attempt to tackle too-big-to-fail banks, comes too late, as regulators have progressed with other responses to the problem, such as the Financial Stability Board’s proposed rules on total loss-absorbing capacity.

“The world has changed and the problem of the structure of banks is not at the heart of the crisis,” he said. On structural decisions, it’s important “not to add another useless layer that will effectively create competitiveness issues.”

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