LONDON, June 25 (Reuters) - Britain said it will allow
domestic retail bank operations that are being separated from
riskier investment banking to provide some basic derivatives
products to small business customers, in a move welcomed by
Britain is introducing new rules that will throw a
protective boundary around domestic high street banking in an
effort to protect taxpayers from having to bail out losses made
in riskier parts of investment banking. The changes will come
into effect by 2019.
The Treasury put final legislation before Parliament on
Wednesday setting out the rules on what banks must put within
their "ring-fenced" business and what must sit outside.
It now plans to allow banks to sell basic options allowing a
company to hedge against any changes in currencies, commodities
and interest rates. Under draft proposals, retail banks would
not have been able to offer small businesses options to hedge
"Making changes to ensure that simple options and normal
trade finance activities are within the ring-fence is an
important step to ensuring banks can continue to serve
medium-sized businesses as they grow and expand into new
markets," said Matthew Fell, director for competitive markets at
industry group CBI.
(Reporting by Steve Slater; Editing by Elaine Hardcastle)