Third, financial stability would benefit from structural reform of the banking system. By separating the most risky securities and derivative activities from deposit banking, the spill over from deposit protection to speculative risk taking would be prevented. This would reduce the distorted incentives to expand trading activities and concentrate risks in deposit banks because of their privileged position in the deposit market.
Finally, the structural reform of banking is a complement, not a substitute for other regulatory improvements. For central banks, the development of macro-prudential policies and  4  High-Level Expert Group on reforming the structure of the EU banking sector. Final report. Brussels, 2 October 2012. 6  BIS central bankers’ speeches  instruments is especially relevant.