EU likely to reject Obama banking limits

THE European Union will more than likely reject US President Barack Obama’s plan to limit banks’ size and trading activities in a bid to reduce risk in the sector.

EU sources indicated the 27-nation bloc would instead focus on raising banks’ capital requirements and tightening financial regulation and pursuing initiatives already under way in the European Parliament.

Obama’s dramatic proposals would prevent banks from investing in, owning or sponsoring a hedge fund or private equity fund, and set a new limit on banks’ size in relation to the financial sector.