Though this is the main business news today, this idea was first muted back in April when the Independent Commission on Banking (ICB), which was set up in 2010 to examine ways to reform the banking sector after the credit crisis.

The ICB recommendation was not to entirely separate banking groups’ altogether, but suggested retail banking should distance itself from investment banking, effectively working as different business units under one parent holding company.

The ICB also recommended that top retail banks should hold a minimum core Tier 1 capital ratio of 10 percent.  This equates to 3% higher than the 7% recommended by the Basel committee of global banking supervisors.

Furthermore, the Commission suggested Lloyds may have to sell more branches on top of an order by European regulators for it to divest some 600 branches following its bailout by the UK government during the credit crisis.

There was a fall in shares in this morning’s market trading, as word spread of George Osborne’s speech and the UK Government backing for the ring-fencing recommendations today.

UK banks believe the recommendations to ring-fence retail banking from riskier trading operations needs further debate.  But the Conservative -Liberal coalition government may use this in an attempt to gain public support by showing they are reforimng the banking industry without damaging the UK’s competiveness in world finance.

Speaking on Radio 4’s Today Programme, Angela Knight British Bankers’ Association chief executive said:

“There are a lot of issues and a lot of details that need to be thought through and need to be discussed.”

The four main banks – Lloyds, HSBC, RBS and Barclays have differing views on the ring-fencing proposal.  Lloyds favour a broad ring-fence including far more assets than a set-up supported by Barclays and RBS.  While HSBC has previously stated that all banking book assets should go into the ring-fence, which would include mortgages, corporate loans and all long-term assets it holds being protected by a government guarantee.

HSBC and Lloyds are equally concerned that a narrow model would create a funding mismatch, whereby the ring-fence would be “overfunded” and not able to use extra deposits to fund its portfolio outside, which would have to be funded in wholesale markets.

We all know that having credits card in our possession can make life immensely easier, especially if they are interest free credit cards. Rather than always having to carry cash or waiting until payday to purchase the things we need in our lives today, paying under a credit agreement from a lending body proves to be a convenience time and time again.

Using a credit card has only become a greater convenience with the explosion of services and products available for purchase online, too. As more and more companies offer home delivery options, it can feel as though with credit cards, we’ll never have to leave the house again! Whether you’re shopping for your groceries, using an online auction site, purchasing clothes or even buying an insurance policy, however, it is important to be careful as you go through each and every one of your online buys.

It is a sad truth, but just as the Internet has made it easier for us to shop online, it has also made it easier for hackers and scam artists to take advantage of our personal information. This can lead to everything from receiving spam emails and viruses to more extreme cases of unauthorised credit card charges, fraud and identity theft.

We have all heard the facts and statistics about how identity theft is on the rise in Britain. Recently, for example, the Daily Mail reported that the average Internet credit card fraud incident has reached upwards of £500 per person per year. From this, we can gauge that the problem is a serious one. If you do not take some simple precautions to make sure that you use your credit card safely on the web, it will likely only be a matter of time before you have credit fraud committed against you.

While it may seem rather obvious, always make sure that you know where your credit cards are. In the event that they get lost or stolen, call your bank or lending body immediately to close the account and cancel your cards. This way, even if someone is in possession of your cards, they will not be able to steal any money from you.

On top of this, it’s a good idea to keep track of the balances on all your credit cards every day. While it may seem like a nuisance, this measure will not only help you to ensure that no one is getting into your accounts, but it will also allow you to monitor what you are spending so you can figure out your finances accordingly.

Another thing to consider is that if you are shopping online, you should always make sure the site you are making a purchase from is a secure website. If you do not see an icon with a lock symbol on the browser page, it may not be a smart idea to carry on with the purchase.

Most of the time, however, you will really just have to rely on your common sense. Remember that no banks or lending bodies will ever ask you for your information via email, so if you get any messages requesting details, mark them off as spam and move on. Additionally, if something looks too good to be true, chances are that it is. Do not be fooled by pop-ups which promise you ways to get rich quick, for instance.

When it comes to online commerce, listen to your intuition. If you have a bad feeling about the website you want to make a purchase from, go with your gut and do not supply the site with any of your personal information or your credit card number.

It is important to be aware of the dangers you may face when making purchases over the web and in everyday life. If you are able to exercise a certain amount of caution, use common sense and remain aware of what you are doing, however, you will put yourself in a much lower category of risk.

If your company is already up and running or is in its earliest stages, the bank has a selection of business accounts that could be ideal for your needs. If you fall into the former category but are unhappy with the service you are currently getting, you may find switching banks is the right way to go. In these cases Lloyds TSB’s business banking department will do all it can to make the transition as easy as possible. Those in the latter stage however may be looking for all the help they can get and it is here they may also find they’re well catered for.

In order to help manage cashflow and resources in an effective way, Lloyds TSB has produced a selection of guides for both the experienced and novice entrepreneur. The bank has also produced a charter for small businesses which is designed to underline exactly what type of support can be offered across pledges that could provide help in the toughest of economic times.

The selection of guides also includes details on how to plan for these conditions and how changes in the market can impact your venture. Information on how to encourage customers to pay up on time is also featured, as is advice on how to monitor money flows between you, your customers, suppliers and employees. A selection of downloads, podcasts and webinars that support some of these issues are also available via the Lloyds TSB business banking website, meaning you have direct access to tips from a selection of experts once you are onboard.

The bank also has a partnership with Sage, one of the biggest suppliers of business management software in the UK, which provides users various free tools. In addition to this there is a 90-day trial version of Sage Start-up that will show you how to get to grips with some of the key issues that affect new businesses. Information available from the Institute of Credit Management is also available that covers subjects like knowing your customer, invoicing, credit insurance and treating suppliers fairly.

All of the above, in conjunction with access to a dedicated relationship manager that will help you make the most of your new business account, could mean that Lloyds TSB could be a great partner to have in getting your project where you want it to be.

Restrictions put in place by the financial institutions to make the business of borrowing money may have been eased slightly, but too late in many cases to help the many businesses that demanded help a year or more ago.

The government’s may have saved the high street banks, but in doing so left many business of all sizes having to fend for themselves. The results of this are still clear to see with news of job losses around the whole of Europe almost on a daily basis.

The fact is that none of us are safe from the constant talk of job losses and redundancies and many have already adjusted to living on a more frugal budget as they do not know if they will be next.

There are many amongst us who use our credit cards on a daily basis and have built up a balance that is becoming a struggle to deal with. In the past it was easy to transfer outstanding balances to another card offering zero interest for a given period, giving some reprieve to the borrower who could make plans to clear the debt without incurring further charges.

These zero percent offerings are almost a thing of the past in today’s climate, but there are still some low APR credit card offers around. The Republic of Ireland’s third largest credit card provider MBNA  for instance are currently offering zero per cent on transfers to their Platinum Card for a period of the first ten months.

The Platinum card is one of a range of credit cards that are acceptable in over 29 million retail outlets and 1.2 million ATMs around the world, making it one of the best credit card deals in Ireland right now.

With the current exchange rate it would be worth arguing the case for joining now, but that would only serve to devalue sterling even further than it already is and of course there are far deeper reaching problems to be resolved before it would even be worth considering.

If ever there was a time that I have personally wished for a single currency it has been when conducting business transactions with other countries in Europe, most often dealing with companies in Germany.

When we started out importing goods it was secondary to our main business and my partner and I were content to let our company bank deal with the transactions. While it is hard to find fault the bank have in the past been very slow to transfer money and always with a substantial fee involved.

Something I learned recently is that it is possible to reduce risk against constant fluctuations in exchange rates by using a foreign exchange hedging strategy that enables you to guarantee a worse case rate when purchasing from overseas on a regular basis

There are other options available through foreign exchange brokers that you might consider and one would be to ‘fix’ the rate with a forward contract over an agreed period of time. This would protect you against adverse rate changes but would offer no benefit from improvements in the rate.

As well as making international payments, foreign exchange brokers can also accept payments from customers that you have exported goods to, and in the case of World First they would guarantee the best exchange rate, with a fast and efficient CHAPS payment to your account.

Payment to these overseas companies is now under review as I am convinced that a foreign exchange broker would not only speed up transfers but would save my company money too, with the possibility of further savings through one of the many specialist products.

The staff cuts will be made in the bank’s retail division and will mainly effect employees in the service sector. HSBC is adamant that it will be losing people and not high street branches.

The majority of the job losses will be through the credit card and collections offices which will contract form nine regional offices to just two based in Birmingham.

HSBC say that any decisions that effect staff are always difficult, “but this restructure is an essential part of streamlining our business.” The bank currently employs 40,000 staff in its UK retail operations and says that branch staff will be ‘mostly unaffected’ by the cuts.

The stock market has become more unpredictable than it was in the past. The once flourishing real estate market has shown a steep decline. People are desperately looking for ways to get out of debt. The present economic dilemma plaguing the United Kingdom and the other first world countries is a result of the global economic depression.

The International Monetary Fund (IMF) predicted a fall in global income particularly this year and also a drop in global trade. Interest rates have been reduced to 0.5%, which is the minimum in the history of the United Kingdom for 315 years.

The shortfall of the UK government surpassed 10% of the Gross Domestic Product (GDP) in 2008 and might be even more in the next few years. Job losses struck 2.1 million people and analysts are cautioning that it would simply cross the barrier of 3 million by the end of 2009.

Inflation dropped steeply from 5.2% to 2.9% in the month of September 2008. Banks are still unwilling to offer money, which sustains the credit dilemma. With the present economic disaster, a basic Keynesian model i.e. the Fiscal (hike in government expenses and reduction in taxes) and Monetary Policy (reduction in interest rates to raise the supply of money in the economy) should be utilized to increase demand and thus support the economy.

However, the fact is we are not surviving in a one-period world and government deficit hikes made at present encourage public sector debt later on. The United Kingdom is presently applying a blend of the two models. However, this does not appear to be politically viable and reliable in the present financial market.

So what should the current government do? Many experts are of the opinion that the government should not do anything and instead wait for the economy to improve. Economic cycles are usual and this might be one of the causes behind this view.

They also feel that there is no emergency requirement for a dynamic fiscal policy. There is need for reconsideration as to how to save the financial/banking sector so that it minimizes public fund usage. Concentration should be on establishing more trustworthy banking institutions.

bovis homes group

The UK’s Bovis Home Group have seen an increase in reservations for new homes in the first half of the year, but still see no signs of stability in the housing market.

Private reservations increased by 92% during the period up to June 2009 compared to the same period last year, but still amounts to just 901 homes reserved. Private completions rose by 18% but was offset by decline in social housing completions.

Completed sales fell by 11% to 754 homes accompanied by a fall in net sales prices of 18% reducing turnover, margins and gross profits.

“Activity has to increase before we can start to think about the housing market in general becoming a more stable place,” says Bovis CEO David Ritchie, although the company are bouyant enough to go into the second half of the year looking for development land and expect to meet it’s full year volume targets of 1,800 units, ‘if activity continues at the same rate.’

Hornby who had been the youngest CEO of a main UK bank when he was with HBOS, had previously held posts at senior level with supermarket group Asda. He is currently a non-executive director of Home Retail Group, which owns Homebase and Argos.

Boots merged with Alliance Unichem in 2006, forming Alliance Boots, which was subsequently taken over private by equity firm KKR. The company is Europe’s largest wholesale and retail player in the pharmaceutical industry.

HBOS were taken over by Lloyds TSB in 2008 and Hornby later apologised to MPs over his part in the banks collapse.

“Firms are not saying that credit conditions are getting better, but the severity of the disruption is no longer worsening as sharply as it was three months ago,” said CBI chief economic adviser Ian McCafferty.

Despite the repeated cuts in the base rate over half of the companies surveyed said that the cost of borrowing had remained stable over the last three months, but 35% reported an increase in the cost of existing credit during the same period.

Sixty two percent of companies looking to take out new loans found that the cost had increased during the three months.

The Bank of England in their own report expects loans to be made more readily available to businesses and households, but warns of lending terms being stricter, while the CBI report concluded that companies are not expecting credit conditions to improve greatly during the next three months.