Liikanen ideas worth considering -German watchdog

FRANKFURT, Oct 8 (Reuters) - Germany's markets regulator signalled support for the proposals of an EU advisory group led by Bank of Finland Governor Erkki Liikanen, which called last week for banks' deposit-taking business to be legally separated from higher-risk activities.

"Liikanen's approach is very much worth considering," Bafin chief Elke Koenig told reporters on the sidelines of a banking event on Monday.

His proposals "differentiate much more" than the findings of the Vickers Commission in the UK or the Volcker Rule in the United States, according to Koenig.

One of the attractions of Liikanen's ideas is that they do not seek to dismantle the universal banking model, she added.

"One of the main questions to resolve is whether a bank doing a hedge is doing this for itself or on behalf of a client. I believe this can be defined, but the devil in the details," said Koenig.

She declined to say whether Bafin would approve the BHF acquisition by RHJ , nor did she comment on the ongoing Libor probe.

(Reporting By Edward Taylor)

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Keywords: GERMANY BANKS/WATCHDOG