The UK’s biggest banks could be forced to hold billions of pounds in extra capital to ward off future crises.
Chancellor Alistair Darling is likely to announce that giants like HSBC, Lloyds Banking Group, Royal Bank of Scotland and Barclays should hold more capital than others, according to reports.
It is thought next month’s banking White Paper will contain the provision because Mr Darling has decided that splitting up riskier investment banking arms from deposit-taking operations would be too complex.
Although the Treasury was unavailable for comment, it is expected to call for much closer regulation of large banks – so problems in one part can be absorbed by others.
The bigger banks could also have to make larger prepayments into the Financial Services Compensation Scheme when the industry begins to recover.