Universal bank model not at an end - ECB bank watchdog
FRANKFURT (Reuters) - The re-working of many European banks' business models in response to regulatory changes does not spell an end to the universal bank, the European Central Bank's top bank supervisor, Daniele Nouy, told a German newspaper.
Tighter regulatory scrutiny and the requirement for thicker capital safety cushions for riskier banking business is prompting a strategy rethink at many banks, including universal banks that combine standard deposit-taking and lending with more sophisticated investment banking activity.
For example, Germany's largest lender, Deutsche Bank , is weighing spinning off its retail operations, two sources familiar with the situation have told Reuters.
Asked about Deutsche Bank, Nouy told the Handelsblatt newspaper she would not comment on individual lenders.
"But I don't think that is evidence of the end of the universal bank," Nouy said in an interview published on Wednesday.
Nouy said one lesson of the financial crisis was the importance of having a good plan for winding down a bank in an emergency, which could involve splitting up the bank into various activities.
"There is a close connection between a good resolution plan and the need for a separation between investment banking activities and deposit-taking business," she said.
(Reporting by Jonathan Gould; editing by Jason Neely)
