Ringfencing

Ok kiddo, let's talk about something called ringfencing. Imagine you have a cookie jar with all your favorite cookies in it. Now, your mom tells you that you can only eat two cookies today because you need to save some for later.

To make sure you don't eat all the cookies at once, your mom decides to put a fence around the jar. This fence is called ringfencing. When you want to have more cookies, you have to ask your mom to open the fence for you.

The same thing happens in the big grown-up world. Banks, for example, have a lot of money that they need to keep safe. They have to be very careful with how they use that money because if they use too much, they might not have enough to give back to their customers.

So, to make sure they don't use all the money at once, they also put up a fence around certain parts of their money. This is called ringfencing. This way, if anything goes wrong, the bank can still give back the money that is protected by the fence, and their customers won't lose any money.

So, in short, ringfencing is like a fence that protects certain things so that they don't get used up too quickly or get lost. Just like your cookie jar, banks put up fences to keep their money safe so they can give it back to their customers when they need it.