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Protesters dismantle barbed wire and road blocks leading to the House of Representatives during President Benigno Aquino's annual State of the Nation Address on July 28, 2014 in Manila, Philippines.
In an opinion piece published in the Telegraph newspaper, Sir David Walker, who stepped down as Barclays' chairman six weeks ago, hit back at the UK government's plans to ringfence banking activities, arguing that it would lead to Britain being at a competitive disadvantage since no other country has adopted the policy in the past or has plans to in the future. He called it "uniquely British."
Ringfencing was first touted as a solution to protecting the average person on the street's money in the event of another financial crisis, following the global banking system meltdown of 2008.
Advocates of ringfencing believe that by making sure retail banking operations are conducted in a separate entity to investment banking activities then savings, current accounts, mortgages and day-to-day banking will not be affected by the activities of those who complex, high-risk and high-return products.
This would mean a bank will have to make sure that its retail arm is completely separate and capitalised separately. In other words, if the investment bank needed to be bailed out or went bankrupt, it would not affect the retail bank and its assets.
However, this would, in turn, carry a cost burden for the banks. It is estimated to cost the industry between £1.7 billion ($2.6 billion) and £4.4 billion ($6.7 billion) a year by various independent bodies and accountancy firms, Britain seems to be ploughing ahead with the move.
The Bank of England published a consultation paper in October last year that said British banks would need to hold at least £25 billion ($38.1 billion) in deposits, in order to ringfence retail operations by 2019.
Walker added that if UK Chancellor George Osborne pushes forward on ringfencing plans, then it could lead to an exodus of lenders moving their operations overseas because of the considerable cost a British bank would bear to separate and operate retail lenders and investment banks. HSBC is already considering leaving the UK over ringfencing.
"There is an urgent and compelling need for the Government to review its approach to ringfencing. It is hard to see how the complex structural re-engineering involved will further boost the resilience of banks beyond the new capital and leverage requirements that have been put in place elsewhere," he said in his opinion piece in the Telegraph.
"Ringfencing's role in effective resolution - crucial to protect the taxpayer - is also now redundant as banks adopt comprehensive standalone mechanisms as part of the EU Recovery and Resolution Directive."
In 2010, Sir John Vickers led the Independent Commission on Banking on how Britain could reform its banking system to safeguard against itself against another credit crisis, which led to the bailout of Lloyds Banking Group and the Royal Bank of Scotland.
Then in 2011, Vickers released a report that recommended that Britain's banks should ringfence their retail and investment banking activities "to create a more stable and competitive basis for UK banking in the longer term and provide more than greater resilience against future financial crises and removing risks from banks to the public finances."
Since 2012, the UK Chancellor threw support behind ringfencing and asked a panel of influential politicians, the Parliamentary Commission on Banking Standards, to determine what impact this would have on Britain's banking industry and recommend changes, amendments or additions to the proposal.
The Treasury's latest statement on the ringfencing issue from May, suggests that Britain will move forward with the ringfencing plans: "The government is implementing the recommendations of the Vickers Commission. It is part of the biggest reforms to Britain's banks in a generation and will make the UK banking system stronger and safer so that it can support the economy, help businesses and serve customers."