Why was ring-fencing implemented in the banking sector after the 2007-2008 financial crisis?

Ring-fencing was implemented in the banking sector after the 2007–2008 financial crisis to protect customers and their deposits. www.acquire.fi

The crisis highlighted the inadequacy of risk management practices and resulted in significant losses to customers and investors worldwide. www.acquire.fi In response, regulatory bodies implemented ring-fencing as a measure to address financial risks and protect customers. www.acquire.fi

The aim of ring-fencing is to protect the core retail banking services on which customers rely from risks associated with riskier activities outside the ring-fence, which include investment banking and wealth management. www.t-cnews.com It also seeks to ensure that if a large bank were to fail, there would be minimal disruption to banking services used by individuals and small businesses. www.t-cnews.com