This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-16135247
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| RBS brought near to collapse because of poor decisions | RBS brought near to collapse because of poor decisions |
| (40 minutes later) | |
| Royal Bank of Scotland nearly collapsed in 2008 because of poor management decisions, inadequate regulation and a flawed supervisory system, a Financial Services Authority report says. | Royal Bank of Scotland nearly collapsed in 2008 because of poor management decisions, inadequate regulation and a flawed supervisory system, a Financial Services Authority report says. |
| The FSA admits that its own supervision was "flawed" and "provided insufficient challenge" to RBS. | The FSA admits that its own supervision was "flawed" and "provided insufficient challenge" to RBS. |
| And it says RBS had too weak a capital position to proceed with the takeover of parts of the Dutch bank ABN Amro. | And it says RBS had too weak a capital position to proceed with the takeover of parts of the Dutch bank ABN Amro. |
| The £49bn purchase took place at the height of the financial crisis in 2007. | The £49bn purchase took place at the height of the financial crisis in 2007. |
| Job losses | |
| BBC business editor Robert Peston said: "The costs of the debacle have been enormous. | |
| "Taxpayers had to rescue the bank by injecting £45.5bn into the bank - and are currently sitting on a loss of more than £25bn on this investment." | |
| He added that "although the FSA concedes that the regulation and supervision of banks was 'deficient' and 'flawed', these shortcomings were not negligence". | |
| RBS, which is now 83%-owned by the UK government, has cut 27,500 jobs since the beginning of the financial crisis. | RBS, which is now 83%-owned by the UK government, has cut 27,500 jobs since the beginning of the financial crisis. |
| Last month it reported pre-tax profits of £2bn in the three months to 30 September, compared with a £1.6bn loss in the same period last year. | Last month it reported pre-tax profits of £2bn in the three months to 30 September, compared with a £1.6bn loss in the same period last year. |
| It warned of further job losses and said the global economic slowdown was delaying its recovery. | It warned of further job losses and said the global economic slowdown was delaying its recovery. |
| 'Errors of judgement' | |
| The FSA report also says that in future regulators should be given greater powers to block takeovers. | The FSA report also says that in future regulators should be given greater powers to block takeovers. |
| Directors of banks should also put less emphasis on profit and more on risk management. | Directors of banks should also put less emphasis on profit and more on risk management. |
| FSA chairman, Adair Turner, said: "This report... describes the errors of judgement and execution made by RBS executive management which, in combination, resulted in RBS being one of the banks which failed amid the global crisis. | FSA chairman, Adair Turner, said: "This report... describes the errors of judgement and execution made by RBS executive management which, in combination, resulted in RBS being one of the banks which failed amid the global crisis. |
| "These were decisions for whose commercial consequences the RBS executive and board were ultimately responsible." | "These were decisions for whose commercial consequences the RBS executive and board were ultimately responsible." |
| He added: "In addition, the report concludes that the FSA was too focused on conduct regulation at the time and its prudential supervision of major banks was inadequate." |