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George Osborne hints at formal separation of retail and investment banking

Shadow Chancellor George Osborne has hinted that a Conservative Government could formally separate retail deposit-taking and investment banking

Prime Minister Gordon Brown and FSA chairman Lord Adair Turner have explicitly ruled this out, with Brown stating last week: “We do not envisage, as some have advocated, a rigid divide in future between narrow banking – retail and corporate deposit taking – and investment banking and trading conducted at an international level.”

But on the BBC’s Today programme this morning, Osborne said: “It is something worth considering.”

He added: “There is a debate about whether you literally need to force these banks to be separate or it could be done internally, you could have Chinese walls or something.”

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