Major UK banks such as HSBC, Royal Bank of Scotland and Barclays will have to "ring-fence" their retail businesses, UK Chancellor George Osborne announced this morning.The move is designed to ensure problems in the UK institutions' higher-risk investment banks do not endanger funds deposited by ordinary depositors.Osborne announced the move in a speech delivered around 4am Australian time.He also announced the sale of Northern Rock plc, the UK bank that was bought out by the UK government after suffering a run in September 2007. (The government will keep Northern Rock Asset Management, the separate "bad bank" whose assets are being run down over time.)And Osborne said the government would move to ensure that private investors, not taxpayers, bore the losses when banks struck trouble - a move he described as "bail-in instead of bail-out".In announcing the ring-fencing and bail-in moves, Osborne accepted the key interim recommendations of the UK's Independent Commission on Banking.The ring-fencing proposal will require the major banks to commit additional capital to their retail arms, which will add to their lending costs. The commission itself estimated the move would add around 0.7 per cent to mortgage repayments.The UK government's actions are likely to influence the Australian banking debate. But they are not directly transferable: the investment banking arms of Australia's Big Four are much smaller than those of the British giants.