June 15, 2012 - Banks in the UK will have to outlay as much as £7 billion ($11 billion) annually to comply with new government rules, it has emerged.

During his speech delivered to bankers at London's Mansion House earlier this week, chancellor George Osborne confirmed the government's intention to press ahead with the reforms put forward by the Independent Commission on Banking last year.

Consequently, it will become a legal requirement for financiers to keep their high street operations separate from their investment banking divisions in order to make sure taxpayer funds are not needed for any future bailouts.

The Conservative-Liberal Democrat alliance faced heavy pressure from organisations in the City of London to water down these proposals but has largely stood firm and, according to Reuters, the changes will cost the industry billions of pounds yearly.

Furthermore, Matthew Fell, director for competitive markets at the Confederation of British Industry, believes banks may now find it tougher to lend to businesses, as "the proposals for additional capital requirements are above and beyond those already agreed internationally".