Decoupling the investment firms’ prudential regime from credit institutions

Abstract

This paper will first summarise the European Commission and European Banking Authorities case for a proportionate prudential regime for investment firms and the case for decoupling it from the prudential regime for credit institutions. Secondly, a summary of the key themes of the proposed prudential reforms is presented. Thirdly, it will set out selected industry concerns regarding the proposed reforms; and finally, conclude that the industry will have to continuously state its case for a proportionate prudential regime for investment firms each time the new directive and regulation are reviewed.