EU report calls for firewall between retail, investment bank operations
BRUSSELS (AP) - A new report recommends that European banks create a firewall between traditional retail banking operations and their risky investment banking ones and force executives to personally take losses when their banks fail.
The report, released on Tuesday, was drafted by experts led by the governor of the Bank of Finland for the European Union's executive, the Commission.
Mr Michel Barnier, a European commissioner charged with improving banking regulation, said he will study what impact the report's suggestions would have on banks' ability to lend to companies and consumers.
Risky loans taken on in boom times have left Europe's banks in trouble. As they have pulled back on lending, the whole economy has suffered. The European Union is now trying to ensure that banks are more careful in taking on risk - and won't need any more taxpayer bailouts.