Commission's proposals show a welcome foresight on banking George Osborne has warned that the Commission should not unpick the legislation already proposed in the Bill, which includes the key measure of ring-fencing a bank's retail operations from any investment banking activity. The fear has been that Tyrie's group of MPs and peers would adopt a more radical position and call for a full separation and break up of the country's banking groups. Forcing this to happen would certainly be a huge legislative, regulatory and legal challenge, not to mention threatening unforeseen consequences that could be seriously detrimental to our economy. But similarly, a ring-fence that proves ineffective, not necessarily now but in 10 to 20 years" time say, would be doing us an equal disservice. The Commission's recommendations in its first report, published on Friday, recognise the reality of the banking industry's ability to game the regulatory system in future. It has struck an appropriately sceptical note about regulators" ability to monitor and control banks" behaviour in years to come, given recent experience. As such, it believes the ring-fencing proposals, authored by a previous commission chaired by Sir John Vickers, need strengthening or, in the words of Tyrie's group, "electrifying." If the ring-fence is proving ineffective, Parliament should have the option of enacting a forced break-up of the banks, according to Tyrie and his colleagues. Such a power is likely to act as an effective deterrent to banks that want to push the boundaries and operate on the edge of what is legally acceptable. Do so and you risk dismemberment, is the clear message. But, if adopted, the break-up sanction must be applicable on a bank-by-bank basis, rather than any notion of a blanket industry requirement. If one bank chooses to electrocute itself, others shouldn't be forced to follow. The seemingly more contrite cadre of managers currently running our banks are unlikely to run their organisations in quite such extreme ways as those who drove them into a wall in 2008. But these recommendations are a way of future-proofing legislation to anticipate the behaviour of their successors in times to come. It shows a welcome foresight not always apparent from Parliament and the Chancellor should adopt them into law.