By Daniel Hunter

Talking to the Parliamentary Commission on Banking Standards Sir Mervyn King, the head of the Bank of England, has said that the culture at the leading investment banks has changed.

Sir Mervyn told MPs that the economics of banking had altered, and that in turn is also changing the risk-taking culture of the big banks.

However, Sir Mervyn did go on to say that it would still be necessary to ring fence high street banks from more risky investment activities.

That move was recommended by the Vickers report into banking that was released last year.

The Bank of England is taking over regulation of the banks from the Financial Services Authority next year.

"I feel that the economics of investment banking is changing - has changed considerably - and that itself is driving the new generation of leadership in banks to recognise that it is in their own interest now to change the culture," Sir Mervyn said.

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