Bank of England's Fisher urges end to RBS uncertainty

Wed Jun 12, 2013 7:22am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By David Milliken

LONDON (Reuters) - Britain should end the uncertainty over long-term plans for state-controlled Royal Bank of Scotland RBS.L, a senior Bank of England official said on Wednesday.

Paul Fisher, the BoE's markets director, said RBS's ability to attract investors and sustain lending was being hampered by a lack of clarity over when it would be returned to the private sector and whether it might be split up.

Britain's government ploughed 45.8 billion pounds ($71.4 billion) of public money into RBS to save it from collapse in 2008, and now holds an 81 percent stake in the bank.

Finance minister George Osborne will signal that the time is right to offload the government's shareholding in an annual speech to financiers on June 19, political and industry sources said on Monday, but he is not expected to explain how.

Senior lawmakers are expected to report shortly on whether it would be better to break up RBS instead. Outgoing Bank of England Governor Mervyn King has said RBS would have benefited from a much more radical restructuring.

Fisher - who is in charge of a BoE scheme to boost bank lending - said this lack of clarity was damaging.

"As a matter of market management, I think it is the uncertainty about RBS which has been holding investors back," Fisher said at an investment conference in London.

"People have been saying to us that they don't want to invest in RBS or provide capital because they don't know what is going to happen to the bank," he added.   Continued...

 
A logo from a Royal Bank of Scotland (RBS) branch is seen reflected in a window in the City of London March 6, 2013. REUTERS/Toby Melville