Lord Adair Turner has come out against the re-introduction of a separation between investment and commercial banks, laid down by the US Glass-Steagall Act of 1933, dismantled by legislative reform in the 1980s and 1990s.

His stance runs counter to suggestions by Bank of England Governor Mervyn King in a speech to City bankers yesterday that this type of legislation could be used to prevent retail deposits from being used to fund investment banking.