In financial terms to ring fence is to remove a set of assets from a set of accounts and consider it separately. This could be done for a company or for an individual. Certain assets could perhaps be moved offshore which would lower that company's or person's tax liability. Ring fenced assets in some jurisdictions could also be subject to higher taxation, but the financial arrangement is made to protect the remainder of the business from the higher tax rate. The term is also used in a regulatory sense to describe a way of managing a corporation where certain parts of the business could be ring fenced to ensure that losses in one part did not affect another.
In February 2013, UK chancellor, George Osborne, presented his Banking Reform Bill to parliament that aimed, for the first time ever, separate the retail and investment arms of British banks and erect a ring fence around the retail bank so its essential operations continue even if the whole bank fails. He promised that the legislation, if passed, would "electrify the ring fence" if the bank had been found to flout the rules.