The Ring Fencing Of A Bank

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We now going to critically assess the statement that the ring-fencing of a bank’s retail banking services from their more risky investment, wholesale and proprietary banking activities, scheduled to take place in 2018-2019, is the last and most necessary reform of the UK banking system to prevent a recurrence of a major financial crisis such as the one the occurred in 2008-2010.
Ring-fencing is the separation of all the Bank’s critical banking services from their investment and wholesale banking services . This means to segregate the retail banking from investment banking to protect consumers from systemic problems with the system.
On 4th February 2013 the Financial Services (Banking Reform) Bill (the Bill) was introduced to Parliament. This Bill has sought to implement the ring-fencing proposals of the UK Independent Commission of Banking (ICB), which is also known as the Vickers report. The Bill also represents the UK’s response to wider international calls to structurally reform banks, such as the Liikanen reports’ proposals on reforming the structure of the EU banking sector .
The ICB was announced after the formation of the coalition government in 2010, and its recommendations fell under three headings: retail ring-fence; loss-absorbency; and competition. The ICB said that the ring-fence’s purpose is to separate banking activities where the continuous provision of service is vital to the economy and to customers of a bank. This is order to ensure that the provision
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