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Page last updated at 08:43 GMT, Friday, 22 January 2010

Osborne: 'UK won't go it alone on bank reform'

The shadow chancellor George Osborne has said that he welcomes President Obama's pledge to reform the US banking system but says that he wants international agreement, not unilateral action from the UK.

Speaking on today's programme Mr Osborne said that it was right to separate retail banking from what he called the "riskier" end of the market, adding that Obama's proposals mirrored those put forward by the Conservative party some months ago.

But any new rules should be agreed internationally, he said, otherwise the UK could risk damaging its own banking system by making a unilateral move.

"I don't think these things should be done in just one country, they need to be done across all countries, because these banks operate internationally and we need to get that agreement internationally," he said.

The BBC's business editor Robert Peston said that Obama's plan constitutes 'the biggest shakeup of the US banking system since the Great Depression", with the president wanting to end banks speculating with their own capital and concentrate on serving their clients.

And he added that it would be "pretty tricky" for the UK to go it alone on major banking reform against the wishes of the rest of the EU.

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