Shares in British banks were broadly up on the FTSE 100 ahead of the Independent Commission on Banking's (ICB) interim report, expected on Monday. The ICB was set up by the Coalition government last year.
While the Commission and leading politicians have put forward the idea of splitting investment banks from retail banks in the recent past, reports suggests that the ICB will not propose such a measure in its interim report.
Banks themselves have opposed the idea of an investment-retail split on the grounds that it would make them less competitive internationally.
It is more likely that the ICB will outline proposals known as "ring fencing", which will see investment and retail divisions remain under the same parent bank, but will ensure that each entity is funded and operated separately.
In theory this would mean that retail banking operations could continue unharmed while an investment banking operation that goes wrong could be sold or permitted to fail. However there could also be some downsides for the banking industry.
Keith Bowman, analyst at Hargreaves Lansdown, said, "The negative side, aside from initial costs, could be reduced earnings potential going forward, as the cost of borrowing for a perceived riskier investment banking business is higher, having lost the support of its deposit taking counterpart - a situation not necessarily the case overseas.
"Prior to the report, market consensus opinion for the UK listed major banks is as follows: HSBC Holdings (buy), Standard Chartered (buy), Lloyds Banking Group (buy), Barclays (strong hold/cautious buy) and Royal Bank of Scotland (strong hold)."
By 15:00 shares in Lloyds Banking Group were up 1.07 per cent to 62.52 pence per share, RBS shares rose 0.77 per cent to 43.25 pence per share, Barclays shares increased 0.41 per cent to 296.45 pence per share and Standard Chartered shares climbed 0.77 per cent to 1,697.00 pence per share.
HSBC shares however were down 0.15 per cent to 666.20 pence per share.
Overall the FTSE 100 was up 0.79 per cent to 6,054.77.