The leader of the UK's opposition Labour Party has threatened to break up Britain's biggest banks if they don't radically change the way they do business.
In an interview published Sunday in The Observer, Miliband said that the latest scandal over rigging international benchmark interest rates was evidence of the ongoing need for a thorough change in business culture at the banks.
"Either they can do it themselves -- which frankly is not what has happened over the past year -- or the next Labour government will, by law, break up retail and investment banks," Miliband was quoted as saying.
Miliband is the latest political leader in Europe to militate for a stronger separation between the lending and deposit-taking of high street banks and the more volatile, market-driven activities of investment banks.
France's President Francois Hollande also pledged earlier this year to "separate the speculative sector from the credit sector" without specifying what exactly that would entail. Germany's main opposition party, the Social Democrats, also appear set to include the idea of breaking up universal banks in their election manifesto for next year.
A report commissioned by the E.U. into the structure of Europe's banking industry, compiled by a group of experts under Bank of Finland governor Erkki Liikanen, is widely expected to address the topic. Its publication was originally due in September but is now expected in October.
Write to Geoffrey T. Smith at geoffrey.smith@dowjones.com
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