FRANKFURT Feb 4 Separating banks' riskier
trading activity from their retail business would make the
banking system more complex and is less important than building
bigger capital buffers to prevent future crises, a top central
banking official was quoted saying.
"From my point of view, higher capital and liquidity
requirements are more important for stabilising banks than the
separation of proprietary trading and deposit-taking business,"
Jaime Caruana, general manager of the Bank for International
Settlements (BIS), was quoted saying in Handelsblatt newspaper.
However, it was up to finance ministers if they want to make
changes to the universal banking model, whereby retail and
investment banking are under the same roof, he told the paper.
France and Germany are planning a reform of the banking
system that will leave big lenders largely intact, despite a
welter of rules aimed at making sure taxpayers are not forced to
bail them out in the next crisis.
Meanwhile British finance minister George Osborne is set to
say later on Monday that banks which fail to guard their
day-to-day banking from risky investment activities will face
The BIS has led efforts by international banking supervisors
to force banks to bolster their loss-absorbing capital to help
prevent the spread of financial crises.
Caruana said in the interview published on Monday it was too
early to give the all-clear on the euro zone crisis, despite a
period of relative calm in the markets following intervention by
the European Central Bank.
"It is still possible that the euro crisis can break out
again and worsen," he said, adding that politicians must make
use of the calm brought by the ECB to push through reforms on a
European and national level.