What Does Ring-fence Mean?

Ring-fence is a noun which is used to describe a fence which entirely encircles an estate. It may also mean a complete barrier. In the financial sense of the term it is used to mean the mandatory reservation of funds meant for use within a particular limited sector or department.

As a verb it could mean enclosing (an estate) by means of a ring-fence. It could also mean applying a ring-fence to (for instance, a sector or particular department of a company or government).

Thus in financial terms, ring fence refer to the isolation of a given amount of money to safeguard it from outside risk. This term is though to have its origins in England around the 1980s. Ringfencing is a related term used to describe regulation-imposed measures aimed at restricting the flow of information inside a company.