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The draft rules to be unveiled next month will focus on banks' proprietary, high-frequency and algorithmic trading, sparing market-making - the buying and selling of securities on behalf of clients, according to two sources briefed on the government's position.
"Market-making is not being considered as a risky or speculative activity," one of the sources said.
French President Francois Hollande is therefore steering towards rejecting a call by the European Union's Liikanen Commission last month for most market-making and trading activities to be ring-fenced from mainstream business.
Banks like BNP Paribas and Societe Generale have been lobbying against any restrictions that could give foreign rivals such as those in the U.S. an advantage. Talks between banks and government officials ended this week.
Banks are concerned that the rules will add costs and complexity at a time when the industry is only just recovering from a year-long drive to restore investor confidence by selling assets and cutting staff.
"We are convinced that (market-making) is something which is a solid economic client-related activity...In our mind, what is speculative is very limited," BNP Chief Financial Officer Lars Machenil told analysts earlier this month.
PARIS |
(Reuters) - France is expected to reject tough rules proposed by Europe to curb the riskier activities of banks, after months of lobbying by the industry.The draft rules to be unveiled next month will focus on banks' proprietary, high-frequency and algorithmic trading, sparing market-making - the buying and selling of securities on behalf of clients, according to two sources briefed on the government's position.
"Market-making is not being considered as a risky or speculative activity," one of the sources said.
French President Francois Hollande is therefore steering towards rejecting a call by the European Union's Liikanen Commission last month for most market-making and trading activities to be ring-fenced from mainstream business.
Banks like BNP Paribas and Societe Generale have been lobbying against any restrictions that could give foreign rivals such as those in the U.S. an advantage. Talks between banks and government officials ended this week.
Banks are concerned that the rules will add costs and complexity at a time when the industry is only just recovering from a year-long drive to restore investor confidence by selling assets and cutting staff.
"We are convinced that (market-making) is something which is a solid economic client-related activity...In our mind, what is speculative is very limited," BNP Chief Financial Officer Lars Machenil told analysts earlier this month.
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