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Osborne to back retail bank ring-fencing

George Osborne is set to back Sir John Vickers’ proposals to ring-fence banks’ retail operations by building up a 10 per cent capital buffer.

The Chancellor will accept the Independent Commission on Banking’s recommendation, made in its interim report in April, that large banks’ retail arms should hold capital equal to 10 per cent of risk-weighted assets in his Mansion House speech in London today.

The reform is designed to protect retail savers if the banks’ riskier investment banking operations fail.

Osborne (pictured) is also expected to urge British bankers opposing the reform to engage with the Government on details of how the new system will work in practice.

The ICB’s final report will be published in September.

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