Will UK banks qualify for a derogation under Liikanen?

Author: | Published: 24 Mar 2014

Europe’s proposals for reform of the region’s banks raise the question whether UK banks will qualify for a derogation

On January 29 2014 the European Commission published a proposal for a regulation of the European Parliament and Council 'on structural measures improving the resilience of EU credit institutions'. This proposed legislation is the EU's equivalent of the US legislation implementing what is commonly known as the Volcker rule, and the UK legislation implementing what has been called the Vickers ringfence. It was initiated by the Liikanen report published on October 2 2012, but the legislative proposal departs from the report's conclusions to such an extent that the sobriquet 'Liikanen' no longer appears justified. Contrary to expectations, the legislative proposal appears to steer an uneasy path between both Volcker and Vickers by containing an unexpected Volcker-style prohibition as well as the anticipated ringfencing provisions. This article does not address...