LONDON Oct 3 Suggested structural reforms to
banks should be a cause for concern for investors because they
do not go far enough, a top Bank of England official said on
Wednesday, following recommendations by an EU advisory group for
banks' to separate retail from trading activities.
Andrew Haldane, the BoE's executive director for financial
stability, said there is a "strong case" for regulators stepping
in to lessen the uncertainties over valuations across banks'
balance sheets, which could encourage investors to return to
"At present, investors are pricing for a migraine. The
problem for investors appears to be not so much too-big-to-fail
as too-complex-to-price," Haldane said in an opinion piece in
the Financial Times.
Banking reforms, such as the recommendations announced by
the Liikanen advisory group on Tuesday, would help "mobilise
bank funding and lending", when the economy needs it most.
In the United States, the "Volcker Rule", the precursor to
the publication of Independent Commission on Banking chief Sir
John Vickers' banking reform proposals in Britain, is aimed at
preventing banks from taking risky bets for their own gain
rather than on behalf of their customers.
"Today, the Volcker proposals in the U.S., the Vickers
proposals in the UK and the Liikanen proposals in Europe
envisage a similar unbundling of banking portfolios," Haldane
"Despite the alarm some have expressed, if implemented
faithfully and simply such structural solutions ought to help
solve the too-complex-to-price problem, to say nothing of
too-big-to-fail," he said.