The Chancellor pledges today to “reset” Britain’s banking system, warning that banks will be broken up if they ignore orders to ringfence their investment and retail banking divisions. George Osborne will reveal that the Coalition intends to “electrify” the ringfence that will separate the day-to-day retail operations of a bank from its potentially riskier investment banking division. This means that, if banks are judged by the new Prudential Regulation Authority to be trying to flout the rules, the Government will have the power to order a complete break-up of the bank. [The Telegraph]

The last vestiges of Barclays‘ old guard are being swept away in a clearout that has claimed the finance director and the bank’s legal chief. Chris Lucas, the finance director since 2007, and Mark Harding, the group general counsel who has been with Barclays for ten years, are stepping down, the lender said last night. Their departures emerged before next week’s “ethical” overhaul of Barclays business practices, designed to draw a line under a stream of scandals and allegations that have tarnished its reputation. [The Times]

Centrica is believed to be ready to pull out of plans to build nuclear power stations in Britain – clearing the way for Chinese investors to step in. The expected exit would mean the government’s push for a new generation of nuclear power stations would proceed without any big British company involved. Centrica, owner of British Gas, has the option of taking a 20 per cent stake in four new reactors – two at Hinkley Point in Somerset and two at Sizewell in Suffolk – in a partnership with EDF, the French state-owned utility. These would be the first nuclear power plants to be built in the UK since 1995. But a person familiar with the matter said senior management had concluded that “new nuclear” was “not right” for Centrica, amid concerns about rising costs since the 2011 Fukushima disaster in Japan. A “decision is imminent,” he said. [Financial Times]

Europe’s biggest theme park and attractions operator could opt for New York over London as it plots a possible £3bn-plus stock market flotation, The Times has learnt. Merlin Entertainments, which owns the Legoland and Madame Tussauds chains, is understood to be considering an initial public offering in the fourth quarter of this year or the first quarter of 2014 as it taps the public markets for the next stage of its ambitious expansion plans. [The Times] 

Eurozone finance ministers are expected to delay a bailout for the Mediterranean island state of Cyprus [Monday] as its prospective lenders continued to wrangle over terms that some fear could spark panic in other vulnerable member states. Irate bondholders took to the streets of Nicosia last week after Cyprus’s finance minister, Vassos Shiarly, warned that local people who had invested in bank debt face losses as part of the proposed deal. Shiarly said in The Hague on Thursday: “Provisions have been made [for a writedown] – unfortunately, for junior bondholders, a very unhappy situation.” This represented a victory for the International Monetary Fund – one of the “troika” of likely rescuers along with the European commission and the European Central Bank – which is known to fear that Cyprus could need so much funding that its debts would become unsustainable if bank investors were not forced to take losses. [The Guardian]

European investment banks are set to cut their bonus pools in the coming weeks by 20 per cent in a move that will exacerbate the pay gap with their US rivals. Consultants and bankers estimate that banks including Barclays, Credit Suisse and UBS will reduce overall group bonus levels for 2012 by up to 15 per cent but agree that the cuts will be nearer one-fifth in their investment banking arms. [Financial Times]

Business confidence is increasing and the bank lending drought is easing, according to a series of new surveys today that fuel hopes the economy could be slowly turning around. But City experts are still warning that a sharp rise in investment is needed to ensure a “sustained” recovery. […] Business confidence is an 18 month high, according to surveys published today by both Icaew/Grant Thornton and Lloyd’s Bank, with the former predicting that the surge in its Business Confidence Monitor index from + 4.2 at the end of last year to 12.8 now suggests the economy will grow by 0.4 per cent in the first quarter, avoiding a triple dip recession. [The Independent]