Coy division

6 January 2015 By George Hay Follow @gfhay

Lloyds is questioning why it needs a separate board to oversee non-retail activities. If ring-fencing could cure all ills, carve-outs would merit short shrift. But the UK can act tough in better ways – especially by demanding adherence to global bail-in rules.

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Lloyds Banking Group has suggested to the Bank of England that some UK banks should be exempt from a BoE proposal requiring at least half of a ring-fenced bank’s board to be composed of independent non-executives, says a person familiar with the situation.

In 2011, the UK Vickers commission proposed that retail activities should be ring-fenced from riskier investment banking businesses and have their own capital base.

The Bank of England said in October that it would be “proportionate” in its implementation of ring-fencing.

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