Britain to split banks to protect economy

LONDON, Dec 20 (AFP): Britain on Monday announced plans to separate the retail and investment arms of its banks to prevent a repeat of the financial crisis that triggered massive state bailouts. Backing the recommendations of the government-appointed Independent Commission on Banking (ICB), finance minister George Osborne also ordered Britain's biggest banks to substantially increase their capital buffers. "While a European and international regulatory response to the crisis is important, we cannot rely on this response to make our banking system safe," Chancellor of the Exchequer Osborne told parliament. "The government will separate retail and investment banking through a ring fence (...) to protect the British economy, protect British taxpayers and make sure nothing is too big to fail." Legislation on ring fencing will be completed by the end of the current parliament in May 2015, while banks will be expected to comply "as soon as ... possible thereafter," said Osborne.