British Lawmakers Encourage Campaign for Break-Up of RBS
Chancellor of the Exchequer George Osborne has been urged by British lawmakers on Tuesday to spin off the state-rescued Royal Bank of Scotland into good and bad banks. The Parliamentary Commission on Banking Standards wrote a letter to the Financial Times, saying it was important to examine all the options for RBS's future structure as a matter of urgency.
A report has been ordered by Osborne to weigh up splitting the bank into bad part as part of the government's plan to return RBS to the private sector.
"We will establish a bad bank if it meets our three objectives: if it supports the British economy; if it's in the interests of taxpayers; and if it accelerates the return to private ownership", he said.
The commission has the perception that Osborne does not favor the complex split. It has urged him not to have his decision based on formal accounting conventions.
At the peak of 2008 global crisis, RBS received the world's biggest bailout by the then-labor government. RBS is 81% owned by the government and was rescued by the government with £45.5 billion of taxpayer cash in 2008. According to George Osborne, the economy is rebuilding and austerity is paying off.
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