Financial Regulatory Forum

Watching the banks

  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.

By John O’Donnell

BRUSSELS, Jan 14 (Reuters) – One of the European Union’s top lawmakers has said she may demand a second hearing to quiz the bloc’s designated tax and economics chiefs before the committee she leads decides whether to approve their appointments.

The remarks by Sharon Bowles, who leads the influential economic and monetary affairs committee, cast uncertainty over the line-up of the next European Commission, in particular the would-be tax chief, who has already faced criticism.

“I would have liked more questioning time with him,” Bowles said of Algirdas Semeta, the Lithuanian candidate to take charge of EU taxation whose answers at a European Parliament hearing were described by socialists as unconvincing.