Ring Fencing

Also found in: Dictionary, Financial.
The British government's practice of limiting the monies it gives organisations (such as local strategic health authorities and hospitals) to designated purposes
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Recently, John McFarlane, bank chairman, is believed to have told top staff that the bank needed a way to protect the credit rating of its oversized investment bank because of ring fencing rules.
According to the commission, the ongoing legislation appeared to be leading to a watered down version of Vickers' ring fencing measure.
He added that banks had a tendency to find innovative methods to avoid meeting regulatory requirements, and that they would also find ways to 'tunnel under' ring fencing requirements.
Stephen Hester, chief executive at Royal Bank of Scotland(LON: RBS), has said that forcing ring fencing leads people to believe that in case of a crisis, the ring fenced banks would somehow always be bailed out, according to a Reuters report.
Ring fencing relates to separating the retail operations from the riskier, investment operations.
The CEO of Barclays Plc (LSE: BARC) has said that ring fencing his bank would not affect the firm's prospects.
My personal view is that we can accommodate ring fencing without affecting our capacity to lend.
Banks in the euro zone are getting ready to face a review, which will discuss reforms to the banking structure, the most important recommendation being that of ring fencing.
The Vickers report has advocated protecting or ring fencing retail banking from other riskier investment banking functions.
Global Banking News-September 24, 2012--Volcker says ring fencing banks not the end of regulation(C)2012 ENPublishing - http://www.
Global Banking News-August 26, 2011--Morgan Stanley says ring fencing could reduce profits of banks(C)2011 ENPublishing - http://www.
Global Banking News-July 5, 2011--CBI calls for study to assess cost of ring fencing retail operations of banks(C)2011 ENPublishing - http://www.