Largest banks in EU would face 'narrowly' defined prop trading ban

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The largest banks in the European Union would face a 'narrowly' defined ban on proprietary trading from 2018 under draft plans by Michel Barnier, the EU’s financial services chief.

Bloomberg reports that regulators would also have until then to gauge whether some banks should split off their trading activities into separately capitalized units, according to the document obtained by Bloomberg News.

Banks would be caught by the proprietary-trading ban if they are identified by regulators as 'systemically important' at a global level or if they surpassed certain financial thresholds, according to the undated document. The EU blueprint also includes measures to boost transparency in the market for securities financing transactions such as repurchase agreements, or repos.

Barnier has pledged to propose bank-structure rules before the end of his mandate later this year, saying it’s a vital part of the EU’s fight against too-big-to-fail banks that has dominated his 5-year-term. 

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EU Weighs Ban on Proprietary Trading at Biggest Banks From 2018:

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