The European Union may scrap plan to compel banks to keep high-risk trading activities separate from their main businesses following concerns raised by some member states.
The member states were concerned that this plan could negatively impact the market-making in securities, according to Reuters.
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In a letter to EU vice commissioner Frans Timmermans, European commissioner Jonathan Hill wrote that it is essential to see the progress that could be made on the plan in order to compel banks to separate out risky trading so that contagion could be avoided and customer deposits could be protected if something goes wrong.
Similar measures have already been put in place by countries including Britain, Germany and France in order to lessen the risk of bank trading.
Britain, Germany and France, which represent much of the bloc’s banking assets, are already introducing similar, national measures to mitigate bank trading risks. Scrapping the EU plan "could be an option next year if member state support does not pick up", Hill said in the letter seen by Reuters.
A revision of occupational pensions rules, which has also languished, could also be scrapped.
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By GlobalData"I have concluded that it would be premature to withdraw either proposal now," Hill said.
