UK's top banks benefited from an implicit 45 billion pounds ($71.8 billion) taxpayer subsidy last year due to ongoing state support which makes them too big to fail,the New Economics Foundation (NEF) think-tank said in a report. Its findings come just days ahead of the publication of the Independent Commission on Banking's (ICB) final report into reforming the UK banking sector,partly designed to protect taxpayers from any future financial crisis. The NEF said Barclays got an indirect subsidy of 10 billion pounds last year from the British public. HSBC's indirect subsidy was worth 7 billion pounds while those of Lloyds and Royal Bank of Scotland - which had to be part-nationalised by the government during the credit crisis - were worth 15 and 13 billion pounds respectively. The NEF said these top British banks were able to borrow money at lower interest rates because of the implicit understanding that the government will step in if they fall into trouble. The ICB's final report is expected to back ring-fencing the retail operations of the country's top banks from their riskier investment banking units,in order to protect ordinary savers if an investment banking business gets into difficulty. The ICB also wants banks to hold more capital and wants greater competition in a sector that is dominated by four banks. However,the reforms are likely to take several years to come into effect and may not be implemented until 2015 or later.
