• Structural seperation should help insulate retail banking from external financial shocks
• Concluded that the best policy approach is to require retail ring-fencing of UK banks, not total seperation
• Retail and other activities of large UK banks should both have primary loss absorbing capacity of at least 17-20%
• UK banking competition would be improved by creation of a strong new challenger by way of Lloyds divestiture
• Recommends govt seek agreement with Lloyds to ensure branch divestiture leads to the emergence of a strong challenger bank
• Banking services that are imperative for individuals and small business must be within ring-fence
• View is that setting 2019 as final deadline for full implementation provides ample time to minimise any transition risks
• Recent turmoil is not a reason for avoiding banking reform
• Services to non-Europe customers, trading book activities should not be within ring-fence
• Secondary markets activity, derivatives trading should also not be within UK banking ring-fence
• Plausible range for the annual pre-tax cost to UK banks of its proposed reform package is 4-7 bln
• Corporate deposits, lending to large companies outside the financial sector can be within ring-fence, but not required