Terry Smith in call for UK bank break-up Terry Smith, chief executive of Tullett Prebon, told the Worshipful Company of World Traders last night that "politicians should have the courage of their convictions" and fully separate retail and investment banking rather than compromise with "ring-fencing." "Whenever I have heard the term 'ring-fencing' it has always proven to be ineffective as a barrier to prevent disaster," he said, citing losses incurred by TSB in 1987 from Hill Samuel and Robert Maxwell's looting of the Mirror Group Pension Fund. Banks that threatened to leave if the separation was applied should be ignored. "Good riddance," he said. He added that securitisation, where bundled debts are sold to third parties, should be "banned" because it causes a mispricing of risk by severing the link between lender and borrower. Bonuses "have long ceased to align the interests of employees and shareholders," he said, but "it is a matter for the owners of a business" not regulators. Urging bonus reforms, he added: "As an investor I have no interest in how much a manager is paid but I have a great deal of interest in how that pay is calculated." According to Mr Smith, the crisis can be traced back to "Big Bang." Until [those reforms] are repealed, we will be condemned to suffer the calamities which helped to cause the financial crisis.