German Draft Bill for A Separation of Trading Activities and Criminal Liability of Bank Managers

On February 6, 2013, the German Government published a Draft Bill on the Separation of Risks and Recovery and Resolution Planning for Credit Institutions and Banking Groups (the “Government Draft Bill”). The Government Draft Bill contains proposals for the separation of trading and other high-risk activities from a bank’s deposit-taking business, the introduction of criminal liability for members of the management board or managing directors of a bank who fail to comply with certain risk management requirements, and for recovery and resolution planning for banks.

The attached alert memo summarizes the Government Draft Bill and highlights certain issues raised by it.