Bank ring-fencing of Branch Networks

At his annual Mansion House speech to the city today, George Osborne is going to discuss how Banks will be required to separate the Branch networks, used by Joe public, from the high risk trading areas that come with a health warning.

The Investment arms of the retail Banks are involved in very compex deals in global markets, involving counterparty Banks world wide and this is where the dominoe effect could and did occur, if one of the "too big to fail" Banks actually failed.

This is the world of lightning fast soft and hardware, derivatives of derivatives, high frequency trading and Dark Pools live, worlds away from the typical Branch current account management and all that comes with it.

The ring fencing of the Retail Banks branch operations, from the high risk investment Bank side, is designed to prevent the chaos that has occurred in recent years as Governments have had to step in to bail out cash strapped Banks.

Further protection of the  Banking system will be forced upon the Banks, who will be required to hold more than the current 7% of capital to cover potential future losses, widely expected to be increased to 10%, as recommended by the Independent Commission on Banking.

There will also be news concerning Northern Rock, currently owned by us all, which will be partially privatised, the Branch Network being sold off while the loan book will stay for now under Government control.