Liikanen outlines consequences of EU's bank overhaul

Author: Gemma Varriale | Published: 22 Oct 2012
Erkki Liikanen

The proposed European bank reforms could increase shadow-banking activity, Erkki Liikanen, chairman of the European Union High Level Experts Group has warned.

Explaining the key proposals of the group that is driving bank sector reform in Europe in an October 18 lecture at Frankfurt’s Goethe University, Bank of Finland Governor Liikanen said the interplay between the suggested reforms and shadow-banking activity would need to be constantly monitored.

The Liikanen Group’s central recommendation is a trading ring-fence for Europe’s biggest banks. This would force banks to detach their risky trading activities from the deposit-taking banks, if these activities amount to a significant share of the bank’s business.

Liikanen said the impact of EU reforms on shadow...


 

 

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