HSBC, Barclays and Royal Bank of Scotland will all have to restructure their businesses Chancellor George Osborne is to force banks to ring-fence their retail operations from investment banking.
In a speech on Wednesday he will say banks must be set up so that their branches and public savings and loans would not be damaged if their trading arms ran into trouble.
The legal separation of the functions of big banks was recommended by the Independent Commission on Banking.
He will also announce the privatisation of Northern Rock.
The former mutual was nationalised in 2008, in the early stages of the financial crisis.
Mr Osborne will also say that banks will have to hold more capital to protect themselves against future losses than the new international minimum of 7%.
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