Since the financial crisis, a number of jurisdictions, including the United States, the United Kingdom, France and Germany, have introduced legislation to separate retail and commercial banking from wholesale and investment banking in an attempt to re-structure banks that have been called "too big to fail," "too big to save" and "too complex to manage or supervise".
Until recently, there were two main approaches to bank structural reform: the US Volcker rule’s outright prohibition of certain activities and the functional separation of certain activities ("ring-fencing") employed in the United Kingdom, France and Germany. On January 29, 2014, however, the EU proposed legislation loosely based upon the report of the EU group of high-level experts known as the Liikanen Group. The legislation would introduce a third approach to bank structural reform: an approach that combines elements of the Volcker rule and ring-fencing but is arguably inconsistent with both approaches and that, like the Volcker rule, proposes to have extraterritorial effect.
Please join Alexandria Carr as she discusses the EU's proposal for structural reform of the banking sector and looks at how it may affect banking groups that are headquartered both inside and outside the European Union.
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Mayer Brown’s Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm’s global resources from multiple practices and offices, the initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.