The Independent Panel on Ring-fencing and Proprietary Trading has published its final report: see here (pdf). Various recommendations are made, including that the scope of the ring-fencing regime should be changed to include firms only where there is a clear financial stability benefit.
The terms of reference for two reviews - one for ring-fencing, the other for proprietary trading - have been published by HM Treasury: see here. Both reviews are required by the Financial Services (Banking Reform) Act 2013 (specifically, section 8 and section 10).
The European Commission today published its proposals for the structural reform of the EU banking sector. Included is a ban on proprietary trading by European banks of global systemic importance or those exceeding identified thresholds (€30 billion in total assets, and trading activities either exceeding €70 billion or 10 per cent of the bank's total assets). Also published were proposals to increase the transparency of securities financing transactions: see here. For further information about the structural reform proposals, see: Commission press release | FAQs I | FAQs II | Proposed Regulation (pdf) | Citizens' summary (pdf) | Impact assessment: full text (pdf), executive summary (pdf), annexes 1 to 4 (pdf), annexes 5 to 14 (pdf). A video recording of the Commission's press conference is available below (and will be available for the next seven days):
Final rules to implement the so-called Volcker rule (as found in section 13 of the Bank Holding Company Act, inserted by section 619 of the Dodd-Frank Act) have been published: see here (pdf).
An overview of the rules is available here.
The Financial Services (Banking Reform) Bill received its second reading in the House of Commons earlier this week: see here. The Bill begins the committee stage next week and amendments have already been tabled. Amongst those tabled yesterday - available here or here (pdf) - are several relating to the governance of ring-fenced banks. One amendment sets out a requirement for the Secretary of State to provide by secondary legislation that shareholder approval is required for the appointment of remuneration consultants. Another amendment sets out requirements regarding the composition of the ring-fenced bank's board but is not well drafted: "Half of the board of directors of the ring-fenced body, both executive and non-executive, will be made up of independent persons". Is the intention to require half exactly or (more likely) at least half? Do the words "both executive and non-executive" add anything to the amendment?
The Parliamentary Commission on Banking Standards today published its report concerning proprietary trading: see here or here (pdf). The Commission argues that current and planned reforms do not go far enough to mitigate the risks from proprietary trading. The Commission believes that further measures, including an outright ban, could in principle be desirable.
