Breaking up banks warning

Breaking up Britain's biggest banks would be a mistake according to the CBI business group.

In a stark warning to the Independent Commission on Banking (ICB), new CBI boss John Cridland said a break up would hold the sector back from supporting economic growth.

Mr Cridland said banks must be strengthened to play a part in financing a private sector-led recovery.

He added the UK risked damaging its position as a global financial centre by acting unilaterally.

Part of his submission to the ICB reads: "Improving credit flows and providing relevant financial products to businesses will be critical to drive growth and recovery.

"Financial services in the UK is a world-class sector, accounting for around 10 per cent of total economic output, so we must not jeopardise this position by acting in isolation on reforms."

The Government-commissioned review by the ICB is looking at whether to break up banks in the wake of the financial crisis and to support competition.