AFP, Brussels :
The European Union unveiled long- awaited plans to rein in the “too-big-to-fail” banks Wednesday, rejecting claims they have been too watered down to prevent a repeat of the 2008 banking crisis.
The reforms affect about 30 of the biggest lenders and would stop them trading on their own account as well as forcing them to hive off some of their riskiest activities.
But they stop short of the recommendations in a 2012 EU report that all banks should ring-fence their retail operations from the high-risk trading widely blamed for the global crash.
France and Germany, both seeking to protect their own flagship banks, are meanwhile irritated by the EU’s plans and say their own national laws go far enough.
EU Financial Services commissioner Michel Barnier, announcing the plans in Brussels, said they were the “the final cogs in the wheel to complete the regulatory overhaul of the European banking system.”
“This legislation deals with the small number of very large banks which otherwise might still be too-big-to-fail, too-costly-to save, too-complex-to- resolve,” he said.
The banking crisis that started with the collapse of Lehman Brothers and the ensuing eurozone debt crisis has prompted the EU to adopt a raft of banking sector reforms to tighten overall regulation and minimise excessive risk taking.
The EU did not specify which banks would be covered by the latest reforms on Wednesday, saying only that it would cover around 30 lenders representing over 65 percent of the total banking assets in the bloc.
But Barnier cited Germany’s Deutsche Bank as a relevant case, saying its assets where equivalent to more than 80 percent of the country’s annual economic output, making regulation much more than just a national issue.
Other banking giants likely to come under the new rules would include HSBC and France’s Societe Generale.
Barnier, a Frenchman who is talked off as the possible new European Commission head to be named later this year, rejected criticisms coming from all sides.
“The European parliament says it’s not enough, bankers that it’s too much, Britain wants an exception,” he said.
“When you take all that together, I think we have found the middle way. This text is balanced and realistic.”
