Commission proposes new rules to stop banks’ risky trading

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The European Commission proposed on Wednesday new rules to stop the biggest and most complex banks from engaging in the risky activity of proprietary trading.

“Prevention is always cheaper than cure when we are talking in financial terms but that, on its own, not enough that is why we come up whit this text so that if a bank has to be one in bankruptcy we could do in a orderly way and not improvised and the taxpayers has to pay the cost.” EU Internal Market Commissioner Michel Barnier said in a press conference in Brussels on Wednesday.

The new rules would also give supervisors the power to require those banks to separate certain potentially risky trading activities from their deposit-taking business if the pursuit of such activities compromised financial stability.

The Commission has also proposed accompanying measures aimed at increasing the transparency of certain transactions in the shadow banking sector.

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