UK retail bank capital rules could 'ossify' sector, says review

LONDON, March 15 (Reuters) - Rules forcing Britain's banks to wrap their retail arms with a bespoke cushion of capital should be retained for now, though they could "ossify" the sector in the longer term, an independent review for the finance ministry said on Tuesday.

"On balance, the panel judges that ring-fencing is worth retaining at present," the review chaired by Keith Skeoch concluded.

"In the longer term, there is a risk that retail banking in the UK ossifies and remains focused on addressing the risks and opportunities of the past, rather than being able to adapt to address the risks and opportunities identified in the future."