A review set up by the European Union has reported that wide-reaching structural reform of banks is necessary.

Banks need to be split into separate legal entities, dividing the risky trading end of investment banking from the retail banking side.

This comes from the High-level Expert Group on reforming the structure of the EU banking sector, an advisory group formed by the European Commission. The group’s findings echoes recommendations from the UK’s Independent Commission on Banking from September 2011.

To find out more on the recommendations of the ICB and the dramatic changes happening in banking, securities and investments, take a look at Changes in the Finance Industry.

The report also suggests that bonuses should be partly comprised of bonds, which will decrease in value if risky trades loses money.

The EU internal markets commissioner will now make a decision on the impact of the recommendations and decide on whether to make proposals in line with them.

Read the full report.

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