Liikanen report Recommendations of a working group chaired by Erkki Liikanen, President of the Finnish Central Bank, which were submitted to the EU Commission in October 2012. According to these recommendations, internationally active banks should – have to spin off their trading activities into a legally independent company; this includes proprietary trading as well as market making and hedging for their own needs; – have to build up a capital cushion to avoid the need for state aid in the event of difficulties. – The EU Commission left it to the discretion of the competent supervisory authority whether trading activities must be spun off at an institution. In a statement on the Liikanen Report, the separation is announced in the event that the bank in question is not able to present a convincing risk management (credible risk assessment). – See investment liability, bank, systemic, Basel III, Capital Requirements Directive, Cook ratio, proprietary trading ban, capital adequacy, capital buffer, variable, financial soundness indicators, capital buffer, countercyclical, Tier 1 capital, leverage ratio, liquidity buffer, mark-to-funding approach, risk buffer, stabilizers, automatic, separation banking system, ultimate factoring, waiver rule, mandatory convertible bond.

According to these recommendations, internationally active banks should – have to spin off their trading activities into a legally independent company; this includes proprietary trading as well as market making and hedging for their own needs; – have to build up a capital cushion to avoid the need for state aid in the event of difficulties. – The EU Commission left it to the discretion of the competent supervisory authority whether trading activities must be spun off at an institution. In a statement on the Liikanen Report, the separation is announced in the event that the bank in question is not able to present a convincing risk management (credible risk assessment). – See investment liability, bank, systemic, Basel III, Capital Requirements Directive, Cook ratio, proprietary trading ban, capital adequacy, capital buffer, variable, financial soundness indicators, capital buffer, countercyclical, Tier 1 capital, leverage ratio, liquidity buffer, mark-to-funding approach, risk buffer, stabilizers, automatic, separation banking system, ultimate factoring, waiver rule, mandatory convertible bond.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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https://www.gerhardmerk.de/