Britain's banks will be subject to a wide-ranging probe that will examine the possible break-up of retail and investment banks and ways to boost competition, although no single option is favoured at present.
The Independent Commission on Banking (ICB) was appointed three months ago by the government to assess the structure of the industry in the wake of the financial crisis, which saw taxpayers bailout leading financial groups.
The ICB published a preliminary paper outlining the scope of the investigation.
It said it would look at separating companies' retail and investment banking divisions and imposing limits on proprietary trading and investing, along with looking at boosting competition and market infrastructure reform.
"The list is not intended to be exhaustive and ... the commission has not moved towards any particular options at this stage," it said in a statement.
Despite much strong rhetoric from politicians in recent weeks against investment bankers, many industry members and analysts have said that it is unlikely that British banks will ultimately be forced to break up.
Most universal banks proved stronger than many "narrow lenders" with less diversified business models during the crisis, and a full break-up could also prompt leading companies to shift overseas, analysts say.