02 October 2012

Comments on the Liikanen Report (with audio)

CONFIDENTIAL

My immediate blog

The Liikanen Group Report proposed powerful remedies to the ills of the banking system – but explicitly stopped short of a legal splitting up of banks. Instead, the Group has gone for a bank holding company structure of legally (and IT) separate companies. But the red lines between some of the entities still look quite wish-washy. Indeed, have key elements already been overtaken by other proposals since the Group was launched back in February? In particular, the Commission proposal on Bank Resolution and the BIS consultation on a Fundamental Review of Trading Book Capital Requirements have already eaten some of the Group’s red meat. Have they turned the report into a bit of a damp squib? The Barnier reaction may be telling: “This report will feed our reflections on the need for further action”. Sounds a bit like feeding in the long grass!

To read the full article and listen to my spoken commentary, please click on the link below.

© Graham Bishop