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Britain sets out new law to break up errant banks

Feb 04 2013 Laura Noonan, Reuters

British banks that fail to shield their day-to-day banking from risky investment activities could be broken up, finance minister George Osborne said on Monday, bowing to political pressure to come down harder on reckless lenders. European countries are retooling their financial systems to prevent a repeat of the 2008 financial crash, trying to strike a balance between popular calls for banks to be reined in and warnings that too tight a leash will choke off recovery. With Britain's banks buffeted by scandal on an almost daily basis and part-nationalised Royal Bank of Scotland (RBS) set to be fined up to £500 million this week for interest rate rigging, Osborne decided to "electrify" the ring-fence around banks' core retail activities with the threat of break-up. "Our country has paid a higher price than any other major economy for what went so badly wrong in our banking system. The anger people feel is very real," Osborne said in a speech ahead of the publication of the banking

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