Separation of retail and investment banking

Support for approach in Wijffels Committee report

Rabobank welcomes the Wijffels Committee report (June 2013) as a significant integrated contribution to the discussion on reforms in the banking sector. The bank believes the report contains a coherent vision that includes a number of ambitious recommendations, with the core being formed by increasing the buffers of banks. Rabobank thinks this is the right approach.

Rabobank believes it is important for conditions to be created under which loan capital providers will also pay if a bank runs into trouble. It is important that this be done at an international level owing to the internal market in Europe and the level playing field. Wijffels therefore rightly chooses this as the basic premise. Rabobank believes it would be beneficial for ‘The Hague’ to put this forward in ‘Brussels’.

Reaction from Executive Board Chairman Piet Moerland: ‘We consider the report to be wise, effective and balanced.’

No necessity for separation of retail and investment banking

The Wijffels Committee opts (June 2013) in its report regarding the separation of retail and investment banking for an approach that corresponds with the recommendation made by Finnish politician Erkki Liikanen in Europe. Rabobank believes a separation of retail and investment banking is unwise because the international business community must be able to make use a wide range of services. It would also lead to a loss of diversification advantages within banking groups and to higher costs for services. Higher buffers and improved supervision are the preferred measures, in combination with implementing changes in the sector in the field of risk awareness and culture.

The following position paper provides an overview of Rabobank’s views relating to the separation of retail and investment banking.