Britain’s banks face the possibility of being broken up following the parliamentary commission into banking standards report.
The report calls for the ringfence between high street and investment banks to be "electrified" and warns that plans included in the banking reform bill "fall well short of what is required.”
The report could lead to friction with George Osborne, who last month urged the commission not to put reformation of the banking structure on the political agenda.
A Treasury spokesman said, "The government is grateful to the parliamentary commission on banking standards for its scrutiny of the draft bill and notes that it, 'welcomes the government's action to bring forward legislation to implement a ring-fence'."
This follows last year's recommendation by the independent commission on banking, which was led by Sir John Vickers.
The banking reform bill to implement the Vickers report will be formally introduced into parliament next year.
The report, the first since the Libor scandal, proposes the Bank of England be given legal authority to break up banks that misbehave.
Adrew Tyrie, chairman of the commission, said, “It is the clearest illustration yet that a great deal more needs to be done to restore standards in banking."
This story first appeared in economia.