What is it?

Broadly, the term ‘ring-fencing’ refers to a change in the way in which the large retail (high street) banks are structured in the UK, a number of which have a presence locally. In Guernsey, the banks affected are Barclays, HSBC, Lloyds and NatWest.

The banks that have been required to undergo this restructuring by the UK government, have been divided into a ring-fenced bank, for UK personal and commercial clients; and a non-ring-fenced bank, for all other customers.

In accordance with the new rules, customers in the Channel Islands and Isle of Man, cannot be included within the ring-fenced bank.        

Why has it come about?

Ring-fencing was brought about by changes in UK law following the global economic crisis. 

As of 1 January 2019, the largest UK banks have been required by law to separate core retail banking services from their investment and international banking activities.

What does this mean for you?   

If you have any queries about how ring-fencing impacts you, you should contact your bank in the first instance.    

The local branches of the four banks that have undergone ring-fencing in the UK have continued to be licensed and regulated by the Commission.

They have also continued to be members of the Guernsey Banking Deposit Compensation Scheme.