Bad News For UK's Big Banks As Government Plans To Separate Retail And Investment Banking

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The BBC is reporting that George Osborne is lending his support to proposals that banks must ring-fence retail from investment banking.

The British Chancellor is due to announce in a speech today that banks must ensure retail customers investments are safe if their trading arm runs into trouble.

The legal separation of retail from investment banking was recommended in a report from Independent Commission on Banking.

Under the plans, retail and investment arms will be required to have to have their own premises, IT systems, staff and funding, reports Channel 4.

Banks will also be forced to hold more capital to protect from future losses.

Shares in Britain’s biggest banks dropped when the news was revealed.

 

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