Banking success stories; RBS

[The Spartan]

I'd better think about moving my business account away from NatWest

[ELBBUBKUNPS]

Based on the very juicy contract to perm packages they were offering I'm not supprised there in a loss.

[MyUserName]

I here a massive contractor Kull will take place over the next few weeks (biggest ever) with no notice, collect your stuff and go + no renawals even on promised ones

bigger bench will be required in 2 week time

Where did you hear that from?

[NorthWestPerm2Contr]

I hate to point out the obvious, but it's because it stood to loose billions on bad loans that no one would lend it money and it needed bailing out.

The only sensible question is whether it would have been better to let it fail catastrophically at the time.

The obvious answer is yes - pay £50k to all those who have accounts with them would be cheaper than all these billions.

[NorthWestPerm2Contr]

I'd better think about moving my business account away from NatWest

Yep and I am thinking of moving away from RBS as well. Anybody got any suggestions?

[suityou01]

I hate to point out the obvious, but it's because it stood to loose billions on bad loans that no one would lend it money and it needed bailing out.

The only sensible question is whether it would have been better to let it fail catastrophically at the time.

[doodab]

Probably not, but it might yet be better to wind it down in an orderly fashion if that's possible.

It might be possible, it might even be what they are doing. The bank still needs to be kept running in the mean time, and the losses need to be absorbed, so it's not necessarily going to be cheaper.

[doodab]

The obvious answer is yes - pay £50k to all those who have accounts with them would be cheaper than all these billions.

Well, the naive answer is yes, £50k paid to all retail customers with RBS accounts probably would be less than £46 billion.

You have to factor in that RBS had £2.4bn of assets and a similar amount of liabilities. Savers deposits were a tiny fraction of those liabilities, in total they had something like £600bn of deposits from businesses, governments etc, and the rest was money borrowed from the market. Without the capital injection they would have defaulted on much of that, losses that businesses and other financial institutions would have had to absorb. The knock on effect on businesses would likely have damaged the economy considerably more than £46bn of additional government borrowing has, that's only about 4 months worth of the current deficit.

[AtW]

RBS has lost all the £46bn pumped in by the taxpayer - Telegraph

In all fairness for those who made those 46 bln RBS is an excellent success story...

[AtW]

Also Govt got shares for that money, so even if that money is spent Govt got something that might have value, possibly negative if more cash is required ...