In banking, a ringfence is a separation of retail banking operations - deposits, withdrawals, loans and retail investing for individuals and small businesses - from investment banking operations such as underwriting and derivatives trading.
The concept of ringfencing of U.K. was introduced in September 2011 with the release of the final recommendations of the Independent Commission on Banking (Vickers Commission), which recommended such a separation within U.K. banking institutions such as Barclays, Royal Bank of Scotland, Lloyds and HSBC. Ringfenced operations would be required to hold separate capital reserves that exceed recommendations from Basel III.
- Banking reform: what is ringfencing?. The Guardian.