Britain's banks face some of the world's toughest regulations under reforms outlined on Monday, which require them to insulate their retail lending activities and store up billions in extra capital at a cost of up to £7 billion ($11 billion).
Chancellor (finance minister) George Osborne said he would fast-track legislation based on the proposals, aimed at avoiding a repeat of the financial crisis which led to two of Britain's biggest lenders, Lloyds and Royal Bank of Scotland, being bailed out with massive injections of government cash.
We're getting right up there with the Swiss in terms of having the most onerous capital regime, said Jane Coffey, a fund manager at Royal London Asset Management. It may not restore confidence for shareholders but it will restore confidence for bondholders.
In its final report, the Independent Commission on Banking (ICB) insisted banks hold core capital of at least 10% in their domestic retail operations.
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