Following on from our Nov. 15 scoop, Reuters was the first international media to get hold of the draft law
(Full story)
By Lionel Laurent and Matthias Blamont
PARIS, Nov 28 (Reuters) - A soon-to-be-finalised French banking reform law will have a wider-than-expected scope as Francois Hollande's administration seeks to rein in several related sectors, according to a draft seen by Reuters.
Extra powers will be given to France's banking and capital-markets regulators to keep banks, brokerages, insurers and consumer-credit providers in line and to protect taxpayers from the cost of bailing out failed institutions, the document said.
It marks a flagship attempt by the administration of President Hollande to deliver on a campaign pledge to shake up the financial sector by separating speculative banking businesses from those deemed useful to the economy.
The reform holds back from curbing banks' market-making activities, as previously reported by Reuters, putting France at odds with tough proposals by the EU's Liikanen Commission for a broader ring-fencing of trading activities.
"The option chosen by the French government is to not entirely separate activities," said a source close to the situation. "France wants to pave the way in Europe."
The centrepiece of the reform demands banks like BNP Paribas and Societe Generale put their proprietary trading activities and financing for certain types of hedge funds and private equity into separately regulated entities, according to the draft law due to be unveiled in December.
These entities will be banned from high-frequency or commodity-derivatives trading. Client-related activities like market-making, hedging and other investment services will be spared, as will banks' own investment and cash-management operations, keeping them with the parent group.
(Full story)
By Lionel Laurent and Matthias Blamont
PARIS, Nov 28 (Reuters) - A soon-to-be-finalised French banking reform law will have a wider-than-expected scope as Francois Hollande's administration seeks to rein in several related sectors, according to a draft seen by Reuters.
Extra powers will be given to France's banking and capital-markets regulators to keep banks, brokerages, insurers and consumer-credit providers in line and to protect taxpayers from the cost of bailing out failed institutions, the document said.
It marks a flagship attempt by the administration of President Hollande to deliver on a campaign pledge to shake up the financial sector by separating speculative banking businesses from those deemed useful to the economy.
The reform holds back from curbing banks' market-making activities, as previously reported by Reuters, putting France at odds with tough proposals by the EU's Liikanen Commission for a broader ring-fencing of trading activities.
"The option chosen by the French government is to not entirely separate activities," said a source close to the situation. "France wants to pave the way in Europe."
The centrepiece of the reform demands banks like BNP Paribas and Societe Generale put their proprietary trading activities and financing for certain types of hedge funds and private equity into separately regulated entities, according to the draft law due to be unveiled in December.
These entities will be banned from high-frequency or commodity-derivatives trading. Client-related activities like market-making, hedging and other investment services will be spared, as will banks' own investment and cash-management operations, keeping them with the parent group.
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