UK urges tougher ring-fence rules for EU banks

LONDON (Reuters) – British Chancellor George Osborne urged European Union policymakers on Tuesday to seriously consider adopting proposals to separate banks’ retail and investment banking operations.

“There is an interesting proposal on the table … which envisages ring-fencing European banks’ retail and investment arms into separate entities,” Osborne told a Berlin meeting of European officials, including German Chancellor Angela Merkel.

“Britain is already pushing ahead with similar reforms and I think it’s an idea that the EU, including Germany, should give serious consideration to implementing,” Osborne added, according to a statement provided by his office.

Osborne was referring to proposals from Finnish central bank governor Erkki Liikanen to ring-fence banks’ riskier activities, thereby reducing the danger they posed to the rest of the economy during a financial crisis.

(Reporting by David Milliken and Olesya Dmitracova)