Banks face the threat of being broken up if they do not implement reforms aimed at improving their behaviour.

The government-backed Commission on Banking Standards is looking at the possibility of keeping legislation to split retail and investment banks on the statute books as a “nuclear option” if plans to “ring-fence” banks’ businesses prove inadequate. It is one of several ideas that will be discussed this week ahead of the expected publication on Friday of its report on the Bank Reform Bill. The Bill, which is currently going through Parliament, at present proposes the ring fence, which was recommended by Sir John Vickers, chairman of the Independent Commission on Banking.

Andrew Tyrie, the Conservative chairman of the standards commission, will meet the body’s nine other members, including Lord Lawson of Blaby, the former Chancellor, and Justin Welby, the recently appointed Archbishop of Canterbury, on Wednesday to discuss the report. George Osborne gave the commission the task of handling the pre-legislative scrutiny of the Bill in September, but last month warned its members about “unpicking a consensus” over bank reform. Lord Lawson has been a vocal advocate for the full separation of banks but other commissioners are more cautious....Read more here: Banks face fresh split threat as Parliament eyes new legislation