Banking commission set to recommend RBS break-up

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The parliamentary commission on banking standards is set to recommend splitting up the Royal Bank of Scotland into a good and bad bank.

The BBC reports that a draft final report, given to members last Friday, calls for RBS to be split in the same way as Northern Rock was in 2008 with toxic assets separated from the profitable part of the bank.

Commission members have until next Monday to make amendments and the final report is set for publication on 17 June.

One commission member has told Fundweb sister publication Money Marketing the paper could change “quite markedly” between final draft and final publication depending on which amendments are taken forward, meaning an RBS break-up may not neccessarily become a final recommendation.

Outgoing Bank of England governor Sir Mervyn King recommended splitting up RBS to the commission in March but it is opposed by the Treasury.

Chancellor George Osborne has pledged to amend the banking reform bill to implement the recommendations of the banking commission’s final report.

Reuters is reporting thet Coutts head of international operations Alexander Classen says the bank will not be sold by RBS in a bid to raised capital.