Quote from Robert Peston
"However there is another, more radical option also being assessed by the Treasury. Which would be to simultaneously take out of RBS the most troubled of its global operations, Ulster Bank, with its substantial lossmaking business in the Republic of Ireland and Northern Ireland.
Ulster has £37bn of assets (loans and investments) on a risk-adjusted basis.
One idea would be to transfer Ulster Bank into the arms and ownership of the Irish government, by swapping all or part of Ulster Bank for low quality British loans and investments currently owned by Ireland's National Asset Management Agency: NAMA inherited these stinky British assets when it acquired the problem loans of Ireland's reckless banks.
There is a certain logic to Ireland taking control of Ulster Bank while the Treasury runs off the loans made in Britain by over-excited Irish banks.
That said, the chancellor may conclude that the complexities of valuing all the relevant loans and the legal difficulties in transferring ownership may be too daunting".