Sir John Vickers calls for retail bank ring-fence

The high street retail operations of big banks could be forced into separate subsidiaries to protect customers' deposits - under new proposals to stop the financial system from collapsing if an investment bank fails.

It is one of the main recommendations of the Independent Commission on Banking, which has published its interim report.

It also wants banks to hold more capital, and it is recommending that Lloyds Banking Group should sell off more branches.

The chairman of the commission, Sir John Vickers, said ''we see merit in a UK retail ring-fence''.

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