UK lawyers insist it is possible to effectively ringfence retail and investment activities without restructuring banks into essentially two separate entities.
But the cost and energy of creating a ringfence could force some universal banks to opt for complete separation.
Speaking last week before the UK Parliamentary Commission on Banking Standards (Commission), Professor John Kay said it was incredibly difficult to write rules that make a ringfence sufficiently robust. The market, however, thinks differently.
“It is entirely feasible for a valid and workable ringfencing system to occur within the existing banking and financial sector,” said Mayer Brown partner Dominic Griffiths.
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