Germany's proposed new bank rules would require that both
secured and unsecured investment activities be ring-fenced from customer
assets. By contrast, France, which is working with Germany on the new rules,
plans only to force the separation of unsecured activities from customer
assets.
The full impact of the German bill remains unclear, including
which activities precisely will be prohibited. But whatever form they take,
banks may simply choose to forego proprietary trading, high-frequency trading
and hedge funds entirely, Fitch Ratings suggests….
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