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.

AP