DW: Mr. Hofmann, the so-called Liikanen proposals were recently introduced in Brussels. The plans aim at splitting risky investment banking from traditional consumer banking. The German credit service sector is skeptical: Why?

Gerhard Hofmann: There's no flat-out refusal, but different critical objections: The key question concerns the outsourcing of trade activities as proposed by the Liikanen group, whether it really minimizes risks in the financial system as a whole. Everyone agrees that the "too big too fail" issue - that a bank is too big to drop out of the market - needs to be solved. But it's not clear if the Liikanen proposals are helpful in this regard. We need to examine all proposals, of course, but the Liikanen plan is largely politically motivated.

Liikanen himself admits that the dual banking system could not have prevented the financial crisis. Lehman Brothers in the US, for instance, was purely an investment ban, and yet it triggered massive systemic failures. On the contrary, there were numerous corporate banks like Washington Mutual or mortage backers like Countrywide that triggered systemic risks with their respective insolvencies.

There are proposals in the US and Great Britain for a dual banking system. But the German banking industry argues that it will clash with the German banking system. Why?

There's a long and very successful tradition of the universal bank principle in Germany. In the aftermath of the Second World War, this principle held over the course of several centuries - even politically - and was regarded as very beneficial in ensuring financial service supply for business and private customers. The spread of risks was also regarded as positive. It's important to note that the financial crisis and sovereign debt crisis had nothing to do with the dual banking system - or the universal banking system.

At the same time, there are other banking regulations being considered. Among other things, they should - to put it simply - accumulate more of their own funds to cushion risks better compared to the past. Do you think this will help prevent future crises?

We generally take a positive stance towards this, even though the capital requirements that are currently demanded are a huge challenge for many banks. But it's necessary in order to further stabilize the banking system and to win back trust.

Europe's new stability mechanism has now come into effect, the ESM, which is to help banks, but only in exchange for strict bank regulation. Europe's banks take a critical stance - what about German banks?

It's a divided issue: Big banks that are active all over Europe are generally in favor of European Central Bank (ECB) supervision. But there are questions of details that still need to be worked out. Small, regional banks question any supervision carried out by the ECB. But this initiative generally is supported or simply treated in a neutral fashion. What one rejects are the elements of liability: a transnational liability between bailout funds for banks in different countries - or even worse - a transnational liability for deposit protection funds. Both are currently not up for discussion, but the European Commission regards this as closely linked to European banking supervision.

The EU summit in mid-October will also deal with the issue of banking supervision, which is to take effct as of 2013 - in just three months. At this point, is it feasible for supervison to begin by then?

Many European countries want the work to start by this proposed date, especially because of the already mentioned connection between ESM and banking supervision. Then Spanish banks could be recapitalized through ESM funds. Germany is looking for high quality European banking supervision. But the pressure on the German government to implement the supervision as fast as possible will be quite high. In my opinion we need a lot more time, but from a political point of view, this may not be possible.

Gerhard Hofmann is a board member of the National Association of German Cooperative Banks (BVR). He currently represents the German credit service sector.