14 June 2011 Last updated at 17:15 ET 
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.
He will not put a figure on what minimum he will impose, but Treasury sources said that 10% would be "the right ballpark".
The 10% minimum was another recommendation of the ICB in its interim report in April.
At the time, Mr Osborne welcomed the report, but has not previously endorsed its findings.
The Commission's final report, which is expected to give details of how banks' firewalls will work, is due to be published on 12 September.
Chancellor to call for retail banks to be ring-fenced
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.
In his annual Mansion House speech, 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%.He will not put a figure on what minimum he will impose, but Treasury sources said that 10% would be "the right ballpark".
The 10% minimum was another recommendation of the ICB in its interim report in April.
At the time, Mr Osborne welcomed the report, but has not previously endorsed its findings.
The Commission's final report, which is expected to give details of how banks' firewalls will work, is due to be published on 12 September.
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