Page last updated at 14:10 GMT, Wednesday, 31 October 2012

Banking Standards Commission

Banks could leave the UK if they are asked to separate their retail and commercial arms fully from their investment banking activities, MPs investigating reform of the banking sector have been told.

Martin Taylor, a member of the Independent Commission on Banking (ICB) and a former chief executive of Barclays, gave evidence on 31 October 2012 to the specially convened Parliamentary Commission on Banking Standards, which was set up following the Libor rate-rigging scandal.

Mr Taylor said that "ring-fencing" retail banking from investment banking would give the benefits of simpler supervision without requiring a full split.

The parliamentary commission was asked to look at lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and government policy.

The Libor scandal emerged in June 2012 when UK and US authorities fined Barclays £290m for fixing a key inter-bank interest rate.

The ICB was set up in June 2010 to consider reform of the banking sector, and was chaired by John Vickers.

It made its final report to the government in September 2011, and recommended that retail banks should be "ring-fenced" to protect consumers from risky banking activities.

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