How ring fencing works

From time to time, banks have to deal with unexpected events. In extreme cases this can lead to a financial crisis.

To reduce the impact that has on you as an individual we are making big changes to how banks operate.

Most of us use banks in our daily lives. Both to save and to borrow money.

But for various reasons, unexpected events (called a shock) can hit banks...

Banks will often react by reducing the amount of new lending they offer. That can have a big impact on the economy.

Now see what happens under ring-fencing.

With the ring-fence in place, the retail side of the bank is now sheltered from the full force of the shock.

So your access to savings, loans, and your ability to pay with debit and credit cards is protected.

New Lending