ANALYSIS | WHERE THE RING-FENCE WILL FALL

Mandated in a ring-fenced bank

Taking deposits from and providing overdrafts to individuals and SMEs.

Permitted in a ring-fenced bank

Taking deposits from and providing overdrafts to ANY customer within the EEA, including providing current accounts, savings accounts and investment products that do not give rise to the ring-fenced bank being required to hold regulatory capital against market risk.

Services of the following kinds to individuals and non-financial companies of any size within the EEA:

• Lending to consumers and businesses on a secured and unsecured basis

• Trade finance and project finance.

• Advising on and selling products from non-ring-fenced banks

Prohibited in a ring-fenced bank
ANY services outside the EEA or any services, other than deposit-taking and payments services, to financial institutions.

Also, any services to ANY customer involving activities of the following kinds:

• Structuring, arranging or executing derivatives transactions.

• Investing in stock, corporate debt securities, convertible/exchangeable securities, convertible bonds, partnership interests, mutual funds, exchange traded funds, etc.

• Originating, trading, lending or making markets in securities. However, ring-fenced banks can originate and retain portions of own-label securitisations.

• Underwriting the sale of debt and equity securities.