On July 27, 2013 , new legislation was promulgated in France aimed at the ring-fencing and regulation of certain banking activities. In particular, the reform:
- addresses the separation of lending activities and retail financial services from proprietary trading activities; and
- introduces a strengthened supervisory framework, including, critically, bail-in and other resolution powers.
The reform requires large French banks to operate proprietary trading activities in dedicated non-banking affiliates, separated from financing activities and customer services in order to reduce the risks incurred by depositors.
Commentators have observed that the separation would have a minimal impact on the majority of French banks, given the limited nature of the ring-fenced activities, which are substantially narrower than what would have been required by the US Volcker Rule, the EU Liikanen report or the UK Vickers report.