LONDON (AP) -- The U.K. government needs to get tougher in its proposals to isolate banks' high-street activities from their riskier business, Britain's Parliamentary Commission on Banking Standards says.
The commission reported Friday that the government's proposals for a "ring-fence" to protect retail banks needs to be "electrified."
Commission chairman Andrew Tyrie says that would mean giving regulators the power to force a complete separation of a lender's retail business from its investment banking. Risky investments including exotic derivatives undermined banks' stability in 2008, prompting taxpayer bailouts of two big U.K. banks.
Tyrie says the government's proposals would be "tested and challenged by the banks". The report will be a disappointment for Treasury chief George Osborne, who had warned it against proposing significant changes to the banking reform bill.