By Marcus Leach
The Independent Commission on Banking has, in its interim report, suggested UK banks' retail operations should be protected from their investment arms.
Monday's report didn't go as far as saying the two should be treated, and run, as separate entities, but did say the retail operations should be ring-fenced.
The full report, published by the commission set up by the government to review banks after the financial crisis, will be released in September.
The interim report states that lenders and borrowers took 'excessive and ill-understood risks' during the build up to the financial crisis, adding that implicit taxpayer support encouraged 'too much risk taking' from banks.
It went on to say that banks needed to hold more cash in reserve to protect against future crises, and that creditors, not taxpayers, should be liable for any losses.
It said it was looking at forms of "retail ring-fencing" under which retail banking would would be carried out by a separate subsidiary within a wider banking group.