COPENHAGEN Jan 30 European Central Bank
Governing Council member Erkki Liikanen, who led a working group
on bank regulation reform, stuck to the group's view that
separating banks' trading from retail banking activities was key
to limiting risks inherent in the business.
European Commissioner Michel Barnier expressed caution on
Wednesday over calls to separate some high-risk trading
operations within banks from their market-making role.
Market-making activities were crucial to the broader
economy, the EU official in charge of financial regulation told
the Financial Times.
The paper said Barnier's comments signalled a retreat from
plans to force lenders to build barriers around their securities
But Liikanen on Wednesday warned against loosening the
"The mandatory separation of the riskiest trading activities
from deposit banking is a key step for limiting the impact of
these risks," Liikanen said in the text of a speech to be given
at the Danish Institute of International Affairs.
"Separation of activities is the most direct instrument for
tackling banks' complexity and interconnectedness."
(Reporting by Johan Ahlander, writing by Sakari Suoninen)