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Liikanen ideas worth considering -German watchdog

FRANKFURT, Oct 8 (Reuters) - Germany's markets regulatorsignalled support for the proposals of an EU advisory group ledby Bank of Finland Governor Erkki Liikanen, which called lastweek for banks' deposit-taking business to be legally separatedfrom higher-risk activities.

"Liikanen's approach is very much worth considering," Bafinchief Elke Koenig told reporters on the sidelines of a bankingevent on Monday.

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

One of the attractions of Liikanen's ideas is that they donot seek to dismantle the universal banking model, she added.

"One of the main questions to resolve is whether a bankdoing 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 BHFacquisition by RHJ , nor did she comment on the ongoingLibor probe.

(Reporting By Edward Taylor)

((christiaan.hetzner@thomsonreuters.com; +49 - 69 - 7565 1249;Reuters Messaging:christiaan.hetzner.thomsonreuters.com@reuters.net))

Keywords: GERMANY BANKS/WATCHDOG