UBS trading losses fuel push for split banking in Britain

LONDON -- Would you trust UBS with your money now?

As regulators join the Swiss bank in scrambling to figure out how a single suspect could have racked up as much as $2 billion worth of rotten bets over three years, analysts and politicians say the catastrophic losses reinforce the case for divorcing retail banks from their investment arms.

In Britain, plans to separate -- or "ring fence" -- the everyday banking familiar to most people such as deposits, mortgages, and loans from the complex and potentially dangerous investment trading have been on the cards for months.

The plans were approved by a government-appointed commission days ago, and backers say the arrest of 31-year-old trader Kweku Adoboli on charges of fraud and false accounting could not have come at a better time.

The commission recommended that retail banks should be "legally, economically and operationally separate" from the parent companies and should have "distinct governance arrangements, and should have different cultures."