PBC set to recommend bank ring-fencing

18 December 2012

Recommendations that will see British banks ring-fence their retail and investment businesses are set to be made later this week.

The Parliamentary Banking Commission (PBC) is scheduled to release its proposals for the future of the UK financial industry in the Banking Reform bill on Friday (21 December) and analysts believe the group will take a hardline stance in the aftermath of the global slump.

Last year, the Independent Commission on Banking - a body headed up by Sir John Vickers - produced a report in which it recommended the radical policy of forcing lenders to separate their investment banking divisions from their retail operations.

It was argued that such a move would eliminate the possibility of a repeat of the banking crisis occurring and therefore remove the potential need for more taxpayer-funded bailouts.

And it is thought the PBC will formally back this plan as regulators seek to tighten rules relating to banking practices.

By Gary Cooper

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