UK to force banks to build wall between retail, investment units
22.02.12
Under the plan, U.K. banks will be required to build a so-called ring-fence between these divisions by 2019, when the regulations fully take effect. These institutions will also have to hold more capital as a cushion against financial losses.
In effect, Britain wants to insulate a bank's safer deposit-taking and lending business from its investment and wholesale banking operations, which engage in a range of riskier businesses. As with Wall Street firms, it was these units at Barclays ( BCS ), Royal Bank of Scotland ( RBS ) and other large British banks that rolled the dice in the years leading up to the financial crisis and that nearly took down the country's economy. Also as in the U.S., British taxpayers had to bail out the country's largest banks.
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Source: CBS News