Bank of England Governor Mervyn King has thrown his weight behind breaking up the banks as part of reforms to protect the taxpayer from another financial meltdown.
In a speech to the Buttonwood Gathering in New York, he warned creditors "they will bear losses in the event of failure" and stressed banks in the future must be "financed much more heavily by equity rather than short-term debt", the Telegraph reports.
On separating investment banking from retail banking, he said: "If there is a need for genuinely safe deposits the only way they can be provided, while ensuring costs and benefits are fully aligned, is to insist such deposits do not coexist with risky assets."
UK economic recovery 'to show sharp slowdown'
The economic recovery in Britain is expected to show a sharp slowdown when figures are released later on Tuesday, the BBC reports.
The economy grew by a healthy 1.2% in the second quarter of the year, but most analysts predict that in the third it will have expanded by around 0.4%.
The gross domestic product (GDP) figures released by the Office for National Statistics (ONS) cover the three months to the end of September.
Some economists say the UK has stalled on the back of spending cut threats.
Savers 'losing £12bn in interest'
Savers are losing out on a possible £12bn in interest payments by staying with low-rate accounts, according to to consumer magzine Which?.
It said that nearly half of 1,200 savings accounts in the UK paid interest of 0.5% or less.
Which? said if all savers switched to accounts with the highest rates they could receive an extra £12bn a year.
The British Bankers' Association (BBA) said that details of savings rates were readily available.
US Treasury sells negative-rate bonds
The abnormal state of the credit markets came into focus as the US Treasury sold bonds with negative interest rates for the first time and Goldman Sachs prepared to issue its first 50-year debt deal, the Financial Times reports.
Both developments highlight the difficult choices facing investors at a time when interest rates are at historical lows and the Federal Reserve is moving towards more asset purchases aimed at boosting the economy and staving off deflation.
Investors who believe the Fed will succeed in its efforts - which would lead to higher inflation - accepted a yield of minus 0.55% on $10bn of Treasury Inflation Protected Securities - or Tips - which compensate holders if the consumer price index rises.
UBS profits get tax credit boost
The Swiss banking giant, UBS, has reported a net profit of 1.66bn Swiss francs ($1.65bn, £1.1bn) for the three months to the end of September, the BBC reports.
The number was boosted by a major one-off tax credit of 825m francs.
It compares with a loss of 564m for the same three months last year.
The bank - Switzerland's biggest - said it had suffered difficult market conditions, marked by low levels of client activity, and had also been hit by a rise in the franc.
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