Britain's Chancellor of the Exchequer George Osborne arrives at the High Court to give evidence at the Leveson Inquiry, London, Monday, June 11, 2012. Former British Prime Minister Gordon Brown was the first in a string of current and former political leaders to appear this week at the inquiry, set up amid a tabloid phone hacking scandal to examine malpractice in the media and ties between politicians, police and the press. (AP Photo/Tim Hales)
June 14, 2012 - 3:14 AM
LONDON - The British government is announcing its proposals for banking reform to prevent the repeat of the crisis which forced taxpayers to bail out two major banks.
The Treasury has confirmed that the government will legislate to isolate retail banking from problems which may arise from riskier investment banking activity. That step was a key recommendation of the Independent Commission on Banking to protect taxpayers from bearing the cost of bank failures and to protect the savings of ordinary depositors.
In a briefing ahead of the release of detailed proposals on Thursday, the Treasury said individual depositors would be compensated before bondholders and corporate creditors in the event of a bank failure. The government already guarantees deposits up to 85,000 pounds ($132,000).
News from © The Associated Press, 2012