In a draft report for an own-initiative motion, prepared by rapporteur Arlene McCarthy, the Economic and Monetary Affairs Committee (ECON) in EP urges the Commission to come forward with a proposal for mandatory separation of banks’ retail and investment activities. This would involve establishing a ring fence around bank activities that are vital for the real economy. Retail and investment activities would be housed under different legal entities, with limits on the extent to which they can rely on each other’s funding, separate capital, and exposure limits for intra-group transactions. Separation must also deliver independent decision-making and governance for each entity. ECON considers that the report by the Liikanen High Level Expert Group is a sound basis for initiating reform, which should also apply to the shadow banking sector and unregulated areas of the financial services sector. (Source: Draft Report on Reforming the Structure of the EU’s Banking Sector