The European Commission has unveiled its plan to block some of the activities by big banks that led to the financial crisis.

However it has been much watered down following lobbying from the financial sector.

The banks will not be required to split their loan operations from risky trading activities.

Michel Barnier, the European commissioner responsible for financial services, said it represented “the final cogs in the wheel to complete the regulatory overhaul of the European banking system”.

The rules will not come into effect for at least three year, after they have been approved by the European Parliament and the legislatures of the countries concerned.

The proposals were strongly criticised by Christian Noyer, the Governor of the Bank of France and therefore a member of the Board of the European Central Bank.

He called them “irresponsible and contrary to the interests of Europe”.