Osborne calls for tougher ring-fencing - Banking - News - Moneyfacts

News

Osborne calls for tougher ring-fencing

Osborne calls for tougher ring-fencing

Category: Banking

Updated: 04/02/2013
First Published: 04/02/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Chancellor George Osborne is expected to tell City traders today that the country's largest banks will be broken up if they fail to adhere to new rules.

Under the Chancellor's new proposals, the Government will have the power to completely break up any bank found to be ignoring rules regarding the ring fencing of banks, whereby a bank's retail divisions are separated from its investment business, under the new Prudential Regulation Authority.

The plans have drawn criticism from the banking industry, however.

The British Bankers' Association (BBA) called the proposals "regrettable", with its chief executive, Anthony Browne, declaring: "This will create uncertainty for investors, making it more difficult for banks to raise capital which will ultimately mean that banks will have less money to lend to businesses."

The legislation will be sent to Parliament today and is expected to be law within the next year.

What next?

Find out how to choose the best bank account by reading our banking guides.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Simple measures to improve banking security

The payments industry is gearing up for some big changes in the near-future, with the announcement of some key improvements that should help all of us be more secure when banking online.

Top cashback deals for festive rewards

Savvy shoppers will no doubt be looking to make the most of their hard-earned cash at this time of year, but there isn’t much time left to work out which are the good deals and which are the bad, so it’s time to take action!

Top cashback deals for festive rewards

Savvy shoppers will no doubt be looking to make the most of their hard-earned cash at this time of year, but there isn’t much time left to work out which are the good deals and which are the bad, so it’s time to take action!
 
Close