Cause of RBS near collapse is identified...what a surprise

Hmmm, here's a report that no doubt cost a fortune and the end results could have been predicted by my granny.

"Royal Bank of Scotland nearly collapsed in 2008 because of poor management decisions, inadequate regulation and a flawed supervisory system..."

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."
BBC News - RBS woes caused by poor decisions, says FSA

So basically the boss made some really crap decisions, got paid off and the poor old tax payer saved the day again...

I'm considering a takeover of Yell, can't afford but it doesn't seem to stop anyone else...

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Must admit I made a few crap decisions over the last couple of years, mainly down to the collapse of the construction industry, main contractors folding etc. No one injected money into my business, in fact everyone wanted money out of it and boy did they make sure they got it. It got so bad we got down to having only £300 left in a £5k overdraft facility lol.... Anyway things changed more or less overnight more by luck than anything else we stopped all advertising and seo work completely, no stock was purchased unless needed and was used, if not used it was returned to the supplier.... 2 electricians and 2 plumbers have been taken on plus a tiler. Wages have been kept realistic and we've taken over £350k this year And now the bank wants to know if I'd like a business loan? You couldn't make it up...

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A turn around like that of losing 1.6billion 1 year to 2billion profit the next is surely great, of course... but at that rate it's going to take them 25 years solid of the same thing to make that money injection worth while.

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What a fantastic success story in sea of doom and gloom!

Good to see your bank have their finger on the pulse

After a 3 year battle with San tan bloody der, who screwed up my personal banking with overdraft charges on accounts I didn't own and after multiple letters of apology and compensation, have now finally repaired my credit history, after putting big red marks all over it, I've just found out that our business account with NatWest, has just been sold on to Santander by owners RBS

So anyone else with a Natwest Biz account, guess what.... it appears they have offloaded all of their business customers to Santander.

Looks like it's time to go biz bank account shopping!

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One person not being blamed by the report is David Bowie!!!

RBS grew very quickly during the noughties, and to keep growth levels high, Fred The Shred ordered his his staff to mass buy mortgage derivatives (I think that is what they are called) from wherever. These included US sub-prime mortgages which started to fail in the mid noughties.

That is where David Bowie comes in. He came up with the great idea of selling the royalties of his back catalogue for 10 years for around £35m. The total royalties over that period was around £50m. So Bowie got £35m upfront, which with good investment, he probably trebled.

Mortgage lenders used this scheme to sell on a bunch of mortgages to investor and that is where RBS made its losses!

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Not just a cracking performer, but it seems pretty biz savvy as well!

Unlike the bods in financial services...

Amazing how many times you can repackage a debt, add some super duper star rating and keep selling it on. Obviously assumes the person at the bottom of the food chain can actually afford the repayments in the first place.. oh whoops, they couldn't

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Subprime lenders were giving bad borrowers double what the house they were gonna buy was worth, just to create a lot of mortgages for wall street to 'repackage'. The lenders didn't lose any money since the loans were sold onto investors.

Wall street and investors were left holding the bags when the market collapsed. You gotta be an idiot to buy a loan issued to someone who can't repay it, secured on a house worth less than the loan.

It's a lesson for us all: You can be too big to be allowed to fail.

Personally, I think Western countries have screwed up propping up bad banks. Countries have taken on their debts and thus are hoping they can keep the show on the road until the markets improve.

Not the greatest strategy. Plus our grandchildren will be paying off these debts. Very bad.

it all started with bad residential loans and mortgages...

then commercial loans started to go bad as economy tanked and shops went out of business...

next to go bad will be sovereign debts

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Actually, it's Bill Clinton's fault. His administration pushed mortgages for poor people. Insane, in hindsight. All the dud paper was built on that.

It would be very good long term if the ar*e was kicked out of the housing market. People are putting too much money into a basic good. They should be investing it in businesses.

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