UK bank ring fence may be storing up as much trouble as Brexit

A Bank of England report this year examined 20 smaller banks and found a series of problems. While not calling them out by name, the BOE warned that "fast-growing firms” exhibited "concentrations in higher-risk market segments which may be more vulnerable to stress.”

LONDON: Britain took a step into uncharted territory this year, aiming to make its banks safer. But it might have just driven risk to places where it’s less manageable than before.

The experiment -- the result of an analysis of how the financial crisis damaged Britain’s economy -- began Jan. 1. Big lenders were "ring-fenced”: retail deposit-taking was legally separated from riskier activities, primarily investment banking. Advocates compared ring-fencing to the U.S. Glass-Steagall act, passed after the 1929 crash.