Handelsblatt Exclusive

E.U. to Push for Bank Breakups

European Commission Vice-President Valdis Dombrovskis addresses a news conference at the EU Commission headquarters in Brussels, Belgium, July 27, 2016. REUTERS/Francois Lenoir
European Commission Vice President Valdis Dombrovskis, who is also responsible for financial regulation, wants to get tougher again with banks.
  • Why it matters

    Why it matters

    Policymakers around the world are trying to balance the concerns of the financial industry with those of taxpayers, who don’t want to be on the hook for another bank bailout.

  • Facts

    Facts

    • The European Commission has proposed legislation that would require banks to show their risky investment banking activities don’t pose a threat to the wider bank.
    • The legislation was shelved last year after disagreements emerged in the European Parliament.
    • E.U. Commissioner Valdis Dombrovskis, in charge of financial regulation, now says he remains committed to the reforms and will help the parliament sort out its differences.
  • Audio

    Audio

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It’s been the frustration of politicians ever since the 2008 financial crisis: Banks that are “too big to fail,” and which governments could be forced to bail out at any moment if another crisis hits.

One of the hottest questions in financial regulation is exactly what to do about it, and one of the long controversial fixes is forcing banks to separate their risky investment banking activities from traditional commercial and retail banking.

The European Commission now plans to revive exactly this kind of legislation, Handelsblatt has learned, pushing once again for reforms that were shelved amid disagreements in the European Parliament last year.

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