- 9 updates
Britain's banks were warned today that they would be broken up if they didn't separate their high street operations from their riskier investment banking arms.
Chancellor George Osborne said it was to protect the taxpayer, who would never again bail them out.
ITV News Business Editor Laura Kuenssberg reports on the banking reforms:
The Shadow Chancellor Ed Balls said George Osborne's banking reforms, announced today, do not go far enough:
George Osborne has warned that banks who flout new regulations with be "broken up":
The Chancellor has begun a speech about banking reforms, telling traders at JP Morgan in Bournemouth: "2013 is the year we reset the banking system."
George Osborne said he would increase the powers of the Bank of England, giving it "supercop" status.
Tory MP Greg Clark, the Financial Secretary to the Treasury, said the Banking Reform Bill set to be introduced by George Osborne today will protect taxpayers.
He told the BBC:
Anthony Browne, chief executive of the British Bankers' Association, has said the Chancellor George Osborne's Banking Reform Bill makes it "more difficult for banks to raise capital".
Launching the Banking Reform Bill today at JP Morgan in Bournemouth today, Chancellor George Osborne will say:
Chancellor George Osborne's message to banks comes after the Parliamentary Commission on Banking Standards, which was set up in the wake of the Libor rate rigging scandal, called for a reserve power for full separation if banks did not implement reforms.
Mr Osborne had warned the Commission, against "unpicking the consensus" over reform proposals in the Bill in November, but appears to have heeded their warnings that loopholes could easily develop.
Sir John Vickers, who chaired the Independent Commission on Banking (ICB), has also said he "would not resist" a complete break up of banks if so-called ring-fencing fails to achieve its desired effect.
But the announcement will put the Chancellor on a collision course with the banks, which claim the legislation will damage London's attractiveness as a global financial centre.
Britain's biggest banks will face complete separation if they flout new rules to ring-fence risky operations from savers' deposits, the Chancellor will announce today.
The new legislation will give the Government and a new banking watchdog powers to "electrify the ring-fence" if banks fail to split high street branch operations from the dealing floor.
Launching the Banking Reform Bill today George Osborne will tell traders at JP Morgan in Bournemouth there will be no more "too big to fail".
It comes after the Parliamentary Commission on Banking Standards, which was set up in the wake of the Libor rate rigging scandal, called for a reserve power for full separation if banks did not implement reforms.