France passes banking reforms

AFP-JIJI

France on Thursday adopted banking reforms aimed at preventing a repeat of the 2008 financial crisis but critics said it fell short of promises by President Francois Hollande to get tough on bankers.

The Senate on Thursday approved the law, which will force France’s major banks to move some of their trading operations to subsidiaries.

Critics of the banking sector have called for banks to be forced to strictly separate all trading activities from deposit-taking, protecting savers and taxpayers from potentially risky investments.

But the law only forces banks to move purely speculative trading into separately funded entities, leaving many trading activities attached to deposits.

The reform also bans high-frequency trading, the controversial practise of having supercomputers carry out ultrafast trades, and commodity derivatives trading, which is thought to disrupt food prices.

The law will also require banks to make public a list of their global subsidiaries and activities, in a bid to shine a light on tax havens and fraud.