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Barnier panel to consider EU ring-fences

Wednesday 23 November 2011 – by Andrew Hickley

The European Commission is setting up a high-level committee to look into the potential for replicating the UK’s controversial ring-fencing proposals for EU banks.

Internal market and services commissioner Michel Barnier told the European Parliament on Tuesday that the commission will establish a group similar to Jacques de Larosière’s committee of wise men, which recommended a host of regulatory reforms needed in response to the financial crisis.

Referencing the UK’s Independent Commission on Banking, which has recommended the separation of retail and investment banking operations, Barnier admitted that he is “looking and wondering” if a similar provision could be applied to the European banking sector.

The commission will put in place “over the next few weeks and months a high-level group…on the subject of the structure of banks and the separation in risk management,” Barnier told the economic and monetary affairs committee.

“We will be expecting the findings from them in the very first months of 2012.”

The commissioner implied that members of the high-level committee are yet to be chosen. Instead, he sought to allay MEP Philippe Lamberts’ fears that the group would be filled by industry bankers who could seek to push against any controversial reforms.

Related articles:

Barnier bites back over Basel jibes

Barnier under fire from UK parliament

RBS: Ring-fencing will increase risks

“I will be selecting people with a range of views and backgrounds and who are very proactive in making sure that risk management is organised properly,” Barnier continued.

“I know of some names that spring to mind.”

He added that while universal banks did not create the financial crisis, there are problems with current regulation.

“There are no taboos in my mind,” as to the scope of reform, he said.

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