Govt to split retail and investment banking

The government has outlined details of how it intends to divide the nation's retail banking and investment sectors.

A White Paper has been published by the coalition and sets out proposals on how to make banks more resilient, as well as making future issues more straightforward to resolve.

This is likely to be a popular move, as executive director of consumer rights campaign group Which? Richard Lloyd recently urged chancellor of the exchequer George Osborne to stand firm on ringfencing, claiming it is vital the measures are not undermined by vested interest.

Secretary of state for business, innovation and skills Dr Vince Cable claimed the UK is leading the world in establishing the principle that investment banks should be separated from traditional outlets.

"The necessary changes to the ring fence will be completed in this parliament," the minister commented, adding that the public should not be expected to subsidise banks when they fail.