Written by:
Paul Chisnall, Director, Finance & Operations Policy, UK Finance


The largest UK banks are required by law to separate – or ‘ring-fence’ – core retail banking services from their investment and non-EEA banking activities by 1 January 2019. The requirements apply to banking groups with ‘core’ deposits of more than £25 billion, i.e. the high street banks and – in due course – a handful of their rapidly growing competitors.

Ring-fencing of day-to-day banking services is one of the reforms brought in by the UK government following the financial crisis that began in 2007. It is intended to enhance the resilience of the largest UK banks and to reduce the possibility of essential banking services used by retail and SME depositors being disrupted in the event of a large bank getting into financial difficulty.

With the legislative and regulatory regime for ring-fencing now largely being complete, the banks impacted are now in the process of preparing to comply with the ring-fencing requirements by 1 January 2019 including their submitting applications to the Court for ring-fencing transfer schemes to reorganise their business between group entities.

They are also in the process of taking other steps to lay the foundations for their new structures and in a small proportion of cases this will involve their needing to provide customers with new sort codes. The banks will be in touch with customers and other affected counterparties where this is the case.

Given the reform has been described as arguably being “the largest ever discrete change to the structure of the UK banking system” UK Finance has today added a page to its website drawing together various authoritative sources on the changes taking place. This includes a link through to the ring-fencing web pages of the largest impacted banks.

Signposting the ring-fence
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