BRUSSELS, Feb 16 (Reuters) – Banks in the European Union won’t face a ban on proprietary trading, the bloc’s executive body said on Tuesday, but warned the sector to check its ethics.
Securitised products and derivatives, two areas where banks have raked in revenues over the years, will also come under closer EU scrutiny, officials said.
U.S. President Barack Obama has proposed banning some banks from trading on their own account and limiting their size by forcing divestments of any hedge fund and private equity operation to make them less likely to need public bailouts.
EU finance ministers discussed the plan on Tuesday.
An EU document prepared for the meeting showed there was no consensus to back the U.S. plan which would conflict with the universal banking model in Europe which houses proprietary trading and commercial banking under one roof.
The bloc’s financial services chief signalled no intention to propose a similar set-up for Europe.