PARIS (AP) France's Parliament approved a bill Thursday that splits banks' risky trading activities from their more traditional lending operations in an attempt to tackle the problems that contributed to Europe's financial crisis.
The legislation aims to force banks to house any trading done with their own money and for their own profit in a separate subsidiary by 2015. The bill also requires banks to publicize the details of their activities and their level of taxation in tax havens.
President Francois Hollande's Socialist administration hopes the new rules will prevent deposits from being used in speculative activities.
The French Senate approved the bill Thursday, after a similar vote by the lower house, the National Assembly, the day before. Both houses are led by a Socialist majority.
Under the bill, banks will still be allowed to leverage deposits for activities considered to the benefit of the economy, like lending to companies.
But the measures seemed to fall short of the "long war" against the financial system that Hollande declared during his electoral campaign last year.
By requiring that banks siphon off only those activities considered of no value to the larger economy and made with a bank's own money, the government left out a wide range of operations that some still consider risky.
Another major goal of the bill is to ensure that banks pay for their own mistakes and avoid expensive government rescues. Shareholders would be first in line to rescue troubled banks and the bill calls for bailout fund to be created and financed by the banks themselves.
In addition, the bill creates a new agency to spot and deal with asset bubbles, like the real estate one that hurt so many banks across Europe. There is also a ban on agricultural commodity speculation and on high-frequency trading.
This story has been automatically published from the Associated Press wire which uses US spellings