The Royal Bank of Scotland (RBS) could be implicated in another scandal, the outgoing chairman of UK Financial Investments (UKFI) has said. The potential penalties relate to the US sub-prime mortgage crisis.
The UKFI was set up in 2008 to manage the Treasury’s shareholding in banks that needed bailing out, including RBS and Lloyds.
Robin Budenburg, who is stepping down from his UKFI at the end of the year, said that mortgage trading had been identified as a potential issue and was currently an “outstanding” problem that has yet to be resolved. He added, “It is clear that the [Prudential Regulation Authority] is rightly concerned, as is the board of RBS, about these potential liabilities.”
America’s largest bank, JP Morgan, has already paid $13 billion (£8 billion) to regulators for mis-selling mortgages.
At the beginning of this month, it was confirmed that RBS would not split into a ‘good bank’ and ‘bad bank’, despite MPs saying such a move would allow for a faster recovery.
Instead, RBS will create an internal bad bank in order to ringfence its bad assets. The new arm will manage around £38 billion of the bank’s riskiest assets with plans to remove them from its balance sheet over the next three years.
In the last year, RBS has been implicated in a number of scandals, including the Libor rate scandal. The bank was forced to pay over £390m to regulators in the UK and US for its part in fixing rates .
Additionally, the bank was fined £5.6m for inaccurately reporting more than 44m transactions it had made with other banks and non-retail financial services firms. The incorrect deals took place between November 2007 and February 2013 and represent more than a third of RBS’s transactions during the period.
In 2012, RBS made a record breaking loss of £5.17 billion, more than three times the amount in lost in 2011, yet continued to pay substantial bonuses to employees.
Like our Facebook Page
Harnessing the Sun: The Far-reaching Benefits of Solar Panels
7 Benefits of Purchasing Sustainable Housing
Our Top Five Sustainable Home Renovations For 2023
6 Ways Eco-Friendly Photographers Can Take Beautiful Natural Pictures
Emerging Research In Seagrass Restoration: What Does The Future Hold?
Sustainable Bites: How To Make Your Diet Eco-Friendly
Coffee Farms & Cloud Forests: Colombia’s New Eco Initiatives
Electric Cars: Are They Worth The Switch?
Maximizing the Efficiency of Deliveries: Strategies for Sustainable Businesses
The Rise of Sustainable Cloud Computing
The Future of Sustainability In The Logistics Industry
Can Eco-Friendly Businesses Embrace VPNs to Bolster Cybersecurity?
UK Lags EU in Installing Heat Pumps to Slow Climate Change
Eight Different Eco-Friendly Developments in the Food Industry
5 Key Areas to Look at When It Comes to Business Sustainability
Addressing Leadership Challenges in Green Entrepreneurship
Holding Eco-Friendly Coins is Greener and More Profitable
5 Reasons That Diamonds Can Be Excellent Green Investments
Eco-Friendly Airlines Use Weather Models to Make Safer Flights
Why Should We Invest in Eco-Friendly Homes?
- Features3 months ago
What is the Eco-Friendliest Option to Wash Your Dishes?
- Environment7 months ago
6 Home Improvements You Can Make to Help the Environment
- Environment11 months ago
How to Ensure Your Home’s Eco-Friendly During Construction?
- Business10 months ago
The Pulp & Paper Industry is Reaching its Sustainability Goals