Arab Today, arab today rbs brought near to collapse because of poor decisions
Last Updated : GMT 22:49:43
Arab Today, arab today
Arab Today, arab today

RBS brought near to collapse because of poor decisions

Arab Today, arab today

Arab Today, arab today RBS brought near to collapse because of poor decisions

London - Arabstoday

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. 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. 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. The crisis at RBS (and other banks) helped tip the UK into the worst recession since the 1930s” End Quote Robert Peston 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. 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. \"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.\"  

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