A preliminary Parliamentary Commission report on banking standards has allegedly called for the Royal Bank of Scotland to be broken in two, essentially dividing it into a ‘good bank’ and a ‘bad bank’.
Written by Chris White
The MPs and Lords on the Commission have until Monday to consider the full report before coming to any formal decisions. However, with speculations rife as to the government disapproval of such a measure, many are anticipating that George Osborne and David Cameron will reject the proposal in George Osborne’s annual address to the Mansion House on June 19th.
Writing on his news blog, the BBC’s business editor Robert Peston said: “To date, the Chancellor has made it clear he is not keen on re-engineering RBS. I am told that David Cameron is even less supportive of a break-up.
They fear it would delay privatisation of the bank, which they would like to see begun before the election in 2015.”
With taxpayers owning approximately 81% of the Royal Bank of Scotland the coalition government is eager to see the bank privatised however, dividing the bank into two separate parts would most likely leave over a smaller but much more toxic bank in the hands of continued government administration.