RBS to be broken up 'within weeks' says Osborne

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The Royal Bank of Scotland is to be broken up by the Government into a 'good bank' and a 'bad bank' with the go-ahead to be given within the next few weeks, the Chancellor has disclosed.

The Daily Telegraph reports that George Osborne said the future of RBS was his 'priority for the next two or three weeks' and there was no chance the bank could be left in its current form.

'That's the top of my in-tray', Osborne told The Telegraph, as he also disclosed that while a sale of the state's 81% holding in RBS would now not happen until after the next general election, the Government was preparing to sell Lloyds Banking Group shares to the public.

Osborne added: "RBS was a much more complex bank. To be fair to management past and present it was a bank that was in a lot more trouble. The clean-up job has been more difficult but we have got to make these decisions now about the future for RBS'.

The Government is understood to be weighing up three potential models for dealing with the 'toxic assets' of RBS. The first would to set up a bad bank inside RBS that would be run by an independent team. Alternatively, the advisers have suggested copying the model used by UBS which also created a separate bad bank, but with the support of the country's central bank. A third option would be to establish an entirely separate taxpayer-backed bad bank into which RBS's toxic assets could be placed, along the lines of the method used by the Swedish government in the 1990s.

To access the complete Daily Telegraph article hit the link below

RBS 'bad bank' due in weeks, says George Osborne

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