Minister in Deutsche Bank’s Home State Seeks Stricter Bank Split
A European Union plan to protect depositors by forcing banks to split off some investment banking businesses doesn’t go far enough, said Tarek Al-Wazir, the German state of Hesse’s economy minister.
Banks should segregate market-making, or trading on behalf of clients, in addition to transactions made for their own account, from client deposits, Al-Wazir said in an e-mailed statement from the state capital of Wiesbaden today. Hesse is governed by a coalition of Chancellor Angela Merkel’s Christian Democrats and the Green Party, of which Al-Wazir is a member.
The state is home to Frankfurt-based Deutsche Bank AG (DBK), Europe’s biggest investment bank by revenue, which has repeatedly said a split would drive up costs for clients and hurt European banks’ ability to compete with U.S. firms.
The European Commission, the EU’s executive arm, has proposed allowing banks to use deposits to trade on behalf of clients while prohibiting using the funds to trade for their own account.
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