View more on these topics

Banking commission: Govt should investigate RBS split

The Parliamentary Commission on Banking Standards has called on the Government to publish by September a report on breaking up the Royal Bank of Scotland.

RBS-Building-2012-700x450.jpg

The commission’s final report, published this week, says the Government must examine the case for splitting RBS into a “bad bank” and a “good bank”, which could be sold off.

It says the Treasury must also consider the merits of breaking up the good bank and selling off parts to create multiple firms with the aim of fostering competition.

The commission initially considered calling for the bank to be split, but fierce divisions in the cross-party panel has seen proposals watered down.

RBS chief executive Stephen Hester quit last week and Chancellor George Osborne said the bank will now move on from the “rescue phase” to privatisation.

The commission said the other major state-owned bank, Lloyds Banking Group, is better placed to return to the private sector without restructuring because it is “largely a retail bank” and has “avoided the same public focus on its remuneration policies”.

The report also calls for UK Financial Investments to be wound up as it is acting as a “fig leaf” to hide direct Government interference in the banks it owns.

Commission chair Andrew Tyrie says: “The current state of RBS creates problems for banking competition and for the British economy. Further restructuring may well be needed. The Government may need to be bold.”

Banking consultant Mehrdad Yousefi says: “Any cost-benefit analysis will show beyond doubt that splitting RBS is a bad idea.”

Recommended

Osborne looks to split RBS into ‘good’ and ‘bad’ banks

Chancellor George Osborne has announced Royal Bank of Scotland may be split into a good and bad bank and confirmed the Government is actively considering its options to sell off shares in Lloyds. Speaking at the annual Mansion House dinner last night, Osborne said the Government will conduct an “urgent investigation” into whether to hive […]

UK ‘hard-wired’ with lower levels of homeownership, IMLA report says

  Regulation and the mortgage industry’s self imposed caution after the financial crisis have hard-wired into the UK a lower level of home ownership, warns the Intermediary Mortgage Lenders Association. In a report titled ’Rebalancing the housing and mortgage markets” published last week, IMLA says that the continuing limits on the supply of mortgage finance, […]

Barclays offers fee-free five-year fix at 2.99%

Barclays last week launched a fee-free five-year fixed-rate remortgage product at 2.99 per cent and cut the rates on some of its fixed rate mortgages by up to 0.3 per cent. The loan is available to 60 per cent loan-to-value and is available for loans between £100,000 and £1m. Following the rate cuts, Barclays now […]

Newsletter

News and expert analysis straight to your inbox

Sign up
Close

Why register with Mortgage Strategy?

Mortgage Strategy continues to be the market-leading B2B mortgage publication in the UK, and provides trusted, independent insight with the aim of helping, promoting and analysing the latest developments for mortgage professionals.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Mortgage Strategy Events
Be the first to hear about our industry leading conferences, awards, webinars and more.

Research and insight
Take part in and see the results of Mortgage Strategy's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now