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The Royal Bank of Scotland's big plan not to split off its toxic assets into a "bad bank" last night earned it a credit rating downgrade from Standard & Poor's.

Shares in RBS fell last week after it said it would retain the poor assets internally but S&P was the first ratings giant to downgrade its creditworthiness. The agency warned the RBS decision would mean it will take even longer for the bank to detoxify itself, while a second strut of the plan – to accelerate the sale of its higher-risk assets – was also a worry.

"In our view, these changes create additional near-term execution risks and further delay the group's return to sustainable organic capital build," S&P said.

What a bargain the taxpayer got with this!

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What a bargain the taxpayer got with this!

Imo RBS has done well to settle at just $150m with the US regulator.

Now many non-owners can get back to renting and worrying about people who were 'sold' jumbo-mortgages who were misled into it, as the oldies and landlords and over-reaching entitled speculators. Lap up the new policies of stability for house prices, and bubble preservation without any correction. Make way for the HTB2 £300,000 mortgage smart people pushing to front of the queue, to keep special interests protected for their house prices.

RBS Was Pretty Relaxed About Selling Bad Mortgages

Nov 8, 2013 2:16 PM GMT

Did that reasoning make sense? In hindsight, no, of course not. At the time, I mean, substantively I don't know if you could reasonably have thought "well there's an equity cushion, and house prices only ever go up, so it's probably fine that these loans are all fraudulent." Obviously some people did think that. But the point is: If you think that, why do the diligence at all? Why write a prospectus saying that the loans were underwritten in accordance with underwriting standards? Why not just say "meh, here are some scraps of paper, but house prices only go up, good luck"?

That intense sweaty guy in the basement of the diligence building, or whatever, pounding his Jamesons and kicking his folders -- that guy's terribly damning report filtered up to the banker in charge of approving the deal. And that banker held that report at arm's length with two fingers and said "well, this doesn't help." Then he just ignored it completely. Thank you for your help, Diligence Lead, now go away. Back to the basement with you. Let us never speak of Diligence Lead again.


Or give them early redundancy as per another main bank risk-analysis guy who. Or just sidelined as an irritation against the relentless HPI and liar-loan magic at BoE.

"I went to two meetings. Mervyn turned up to the first one and fell asleep. It hardly made me think I needed to worry about that." The financial stability committee was soon a "running joke" in monetary analysis, the division of the BoE geared around setting interest rates every month. The signal sent by these events could not have been clearer. "Before the crisis, working in financial stability was an absolute career graveyard," says Richard Barwell, UK economist at RBS who left the BoE in 2010 after nine years.


Edited by Venger
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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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