13/12/2011
FSA publishes report on RBS bankruptcy
The British Financial Services Authority (FSA) on 12 December published its report on the bankruptcy of the Royal Bank of Scotland (RBS). The report claims that the bankruptct may be explained as the result of six factors: the “significant” weakness of owners’ equity at the bank, as a result of management decisions and an inappropriate regulatory framework, excessive dependence on short-term financing, concerns about the quality of underlying assets of RBS, substantial losses in credit trading activities, the acquisition of ABN Amro, undertaken without the necessary precautions, and lastly, a general systemic crisis. The FSA also admits its own lack of rigour and errors of judgement in the case.
