LONDON -- Britain's treasury chief is set to say that the country's banks could be forcibly split into smaller pieces if they fail to properly insulate their retail operations from their riskier investment arms.
George Osborne is due to issue the stark warning during a speech Monday before executives from JP Morgan.
According to prepared remarks, Osborne will say taxpayers shouldn't be expected to bail out the banks again. He will say that next time a crisis hits, the treasury chief should have the choice of keeping "the bank branches going, the cash machines operating, while letting the investment arm fail."
Osborne's remarks follow recommendations from the Parliamentary Commission on Banking Standards that proposals for a "ring-fence" to protect retail banks needed to be "electrified" to discourage banks from probing for loopholes.