By Marcus Leach

Chancellor George Osbourne has confirmed that he will force British banks to ring-fence their retail operations from investment banking.

Speaking on Wednesday he said that banks be set up to ensure that if their trading arms were to run in trouble their branches and public savings and loans divisions would not suffer any damage.

This ring-fencing of the big banks comes after a recommendation from the Independent Commission on Banking (ICB).

Mr Osborne has also announced the privatisation of Northern Rock, which was nationalised in 2008 when it hit huge financial trouble at the start of the recession.

Delivering his annual Mansion House speech the Chancellor also announced that banks will be required to have more capital in order to protect themselves from future losses. At present the international minimum is 7%.

Whilst no exact figure for the new minimum was announced sources believe it will be around 10%, which was the recommended figure from the ICB.

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