Chancellor to show support for retail banks to be ring-fenced
In his Mansion House speech this evening, Chancellor George Osborne is expected to confirm that banks will have to ring-fence their retail operations so they are protected from losses from investment banking.
The Chancellor is also expected to suggest that banks will have to hold more capital – a recommendation of the Independent Commission on Banking (ICB) in its interim report in April.
The ICB is set to deliver its final report in mid-September.
Furthermore, Mr Osborne will announce plans to sell-off state-owned Northern Rock. The crisis-torn bank has been split into divisions – a “good bank” of profitable assets and a “bad bank” of toxic debts.