Osborne threatens to break up banks

British banks that fail to separate their retail banking from their riskier investment banking arms may be forcibly dismantled, Chancellor George Osborne will say later today.

The new rules will make the Bank of England responsible for monitoring banks, ensuring day-to day banking and investment banking remain separate. The plans come as part of a banking regulation shake-up following 2008, where £65bn of taxpayers money was needed to rescue RBS and Lloyds. Banks are already required to have ‘ring-fences’ in place that safeguard their retail banking arms from the actions of their investment bank, however the Chancellor is threatening to break up banks that fail to meet the requirements, Reuters reports. “If a bank flouts the rules, the regulator and the ...