Investment bankers at Rothschild are to be paid £850,000 for conducting a review, commissioned by the chancellor, into whether Royal Bank of Scotland should be split into a good and bad bank.
John Kingman, second permanent secretary at the Treasury, recused himself from the selection process as he was global co-head of financial institutions at Rothschild until September.
He had returned to the civil service last year after joining the investment bank in 2009 after running UK Financial Investments, the body set up during the crisis to look after the stakes in the bailed-out banks.
The outgoing UKFI chief executive, Jim O'Neil, also recused himself from the selection process as he prepared to move to Bank of America Merrill Lynch this year.
Rothschild is to provide advice on transferring RBS's troubled assets into a bad bank – but the remit does not extend to a wider analysis of breaking up RBS along any other lines.
Slaughter & May, the law firm involved in the 2008 bank bailouts, has been tasked with advising the government on the possible creation of a bad bank.
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