8. The Forgotten Pillar: On the Rise and Fall of the Banking Structural Reform

This chapter focuses on the reform on the separation of deposit-taking from variously trading-related activities. The reform project questioned a grounding pillar of the modern “market-based” banking system, representing a fundamental threat to the European financial industry. Moreover, the issue attracted a relevant degree of salience in the European public opinion and mobilization from Civil Society groups, becoming a sensible question for the national and European policy-makers. On the other hand, the competitive threats resulting from such a proposal united the European banking industry into a transnational and compact lobbying coalition. The industry pressures brought to a prolonged stalemate in the negotiations, while the decline in issue salience allowed the banking industry to obtain one of its major successes, with the final withdrawal of the proposal.