The Independent Commission on Banking published its final report on Monday proposing that Britain's banks need to “ring-fence” by disconnecting their retail operations from the riskier investment banking arms. Banks were given until 2019 to implement the radical reforms, and could cost between £4bn and £7bn according to the report.

ICB's chairman, John Vickers, said: “Separation would allow better targeted policies towards banks in difficulty, and would minimise the need for support from taxpayers.”

The Vickers report proposed that UK banks should hold a ten percent core tier one capital, rather than the seven percent capital buffers required under Basel III, to help protect against losses.

Retail and other divisions within large UK banking groups should have a loss absorbing capacity of 17 to 20 percent.

“The risks associated with banking have to sit somewhere, and it should not be with taxpayers. For the future then, banks need much more equity capital, and their debt must be capable of absorbing losses on failure, while ordinary depositors are protected,” Vickers said.

For more information on Basel III please see here.