You are here
UK declares new powers to break up banks
LONDON—Britain’s treasury chief warned the country’s banks yesterday that they face being broken up if they fail to protect their retail operations from their riskier investment arms. George Osborne told executives from JPMorgan that the days of banks being “too big to fail” are over in Britain, and that taxpayers shouldn't be expected to bail out the lenders.
The next time a crisis hits, he wants more options to act. “My message to the banks is clear: if a bank flouts the rules, the regulator and the Treasury will have the power to break it up altogether—full separation, not just a ring fence,” he said. “We’re not going to repeat the mistakes of the past.”
The new measure gives regulators the power to force a complete separation of a lender’s retail business from its investment banking. Risky investments undermined banks’ stability in 2008, leading to taxpayer bailouts of two big UK banks.
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff. Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Please help us keep out site clean from inappropriate comments by using the flag option.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments. Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.