The cost of UK mortgages could increase.
Mortgages could rise yet again if the Government successfully manages to force banks to separate their retail and investment banking arms.
The Government's plans were recently set out in a white paper on banking reform. The proposed changes are a means to prevent the Government having to protect retail deposits should any bank collapse through risky investments.
This would mean that UK lenders would no longer be able to subsidise business with the profits taken from retail operations, which is feared will increase both the cost of mortgages and banking services.
It is thought that if UK lenders can no longer use this revenue the cost of borrowing could be driven up which may mean an end to free banking in the UK.
The chairman of Metro Bank has commented advising that 'ringfencing' may not prevent a future banking crisis, it may protect depositors money but by itself it will not stop a crisis.
If the Government gets the white paper through the proposed changes are to be implemented in 2015.
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