UK: banking reform - update from Government

Yesterday the Government published its response to the final report published earlier this year by the Independent Commission on Banking: see here (pdf). The response provides a very strong endorsement of the Commission's report and recommendations. The Government intends to pass legislation requiring the ring-fencing of retail banking activities whereby the ring-fenced bank is legally and operationally independent from the rest of its corporate group. Large ring-fenced banks will be subject to higher equity requirements. A White Paper will be published in the spring explaining how the Government's plans will be implemented. It is envisaged that full implementation will be achieved by 2019.