On May 6, the European Commission published a roadmap for legislative changes. This follows the October 2012 publication of the Liikanen report, which provided a set of recommendations on banking reform sponsored by the Commission.

The initiative seeks to address issues in the EU banking sector, including moral hazard, excessive leverage, lack of market discipline and competition distortions. Accordingly, the roadmap lays down a framework for anticipated EU directives covering which banking activities should be separated from each other or be subjected to separation requirements, the nature and extent of the separation and the de minimis exceptions available for smaller banks.

Although the proposals are expected to have a profound effect on the structure of banks, the Commission states that the “vast majority” of EU banks will not be affected by the initiative. Roadmap. Liikanen Report.