The European Union may give up the controversial measure to force banks to keep high-risk trading activities separate from their main businesses following concerns raised by some member states and the European Central Bank (ECB).
The member states and the ECB were concerned that this measure could negatively impact the market-making in securities, reports Reuters.
In a letter to EU vice commissioner Frans Timmermans, European commissioner Jonathan Hill stated that it is essential to see the progress that could be made on the plan in order to compel banks to separate out risky trading so that contagion could be avoided and customer deposits could be protected if something goes wrong.
Similar measures have already been put in place by countries including Britain, Germany and France in order to lessen the risk of bank trading.
The letter by Hill, which was seen by Reuters, stated that removing the EU plan "could be an option next year if member state support does not pick up."
The European Parliament has joint say with EU states pertaining to draft laws. Often, it has taken a tough line on banks. It may oppose scrapping the draft law outright.
In order to help markets raise funds for companies, Hill aims to set up a capital markets union (CMU) and plans to consult on CMU in the first quarter of 2015 and publish an action plan in the third quarter.
Image: EU may ditch measure to separate banking trading activities. Photo: courtesy of Stuart Miles