Retail vs Investment Banking

I’ve no idea what long term this change will make, but was delighted to receive this notification from my UK Bank, first direct, and HSBC subsidiary.

Something we are (very) unlikely to see here in the US in the near future.

Letter from HSBC

What is says is

We wanted to let you know that in line with new regulations introduced after the global financial crisis, later this year HSBC will be changing the way it’s structured in the United Kingdom (UK).

The new rules mean all banks with deposits of UKP 25bn or more will have to keep their “retail banking” business seperate from their “wholesale and investment banking” businesses, also known as ‘ring-fencing’.

Of course, this won’t stop another global financial meltdown, but at least in principle, they won’t be gambling with our money. If it happens it will still have as dramatic impact since the stocks, shares, futures, and companies will be hit the same way and everything will lose value as it did before. When all is said and done though, this is a good move.

Your move Elizabeth Warren.