An influential group of British lawmakers has backed Bank of England governor Mervyn King's view that officials should limit banks from posing a systemic threat to the financial system.

In a report released Friday, Banking Crisis: Regulation and Supervision, the Treasury Committee said it was unlikely that all banks could be shrunk to a size where they posed no systemic risk, but said the government "can and should still act."

"Major banks have managed to establish themselves in a powerful