Ruth Porter writes for City AM
Ringfencing wouldn’t have prevented the financial crash, the resulting recession or the bailout of banks by the taxpayer.
Northern Rock and Lehman Brothers were both relatively simple banks, one focused on retail, the other on investment; both would still have failed in exactly the same way under the measures the chancellor has proposed.
It is possible – in certain cases – that the Bank of England as financial regulator might feel in the case of a particular bank that ringfencing could be helpful in making its activities more transparent. But this measure should not be a matter for government legislation and certainly not a blanket approach applied to the whole sector.
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