BoE's Carney says uncertainty about RBS' future must end
LONDON (Reuters) - Britain should end uncertainty over long-term plans for state-controlled Royal Bank of Scotland (RBS.L: Quote), Bank of England Governor Mark Carney said in a newspaper interview.
Carney also told the Daily Mail it would be "a challenging task" to avoid a new credit or house price bubble but he was ready to head off any risk.
The newspaper said he gave what could be seen as a veiled warning to the government over its moves to boost the housing market, saying heading off problems "would be difficult to achieve if there were a host of government policies or other events that are pushing in the other direction."
Under the government's Help To Buy scheme, borrowers can buy a home with a deposit of just 5 percent.
Carney's position on RBS echoes that of his predecessor, Mervyn King, who said the bank's ability to sustain lending was being hampered by a lack of clarity over its future.
Britain's government ploughed 45.8 billion pounds into RBS to save it from collapse in 2008, and now holds an 81 percent stake.
Carney told the Daily Mail he would not be drawn on whether he thought RBS should be split into a 'good' bank and a 'bad' bank - something advocated by King and recommended by a parliamentary commission - but made clear the status quo was a damaging one.
"It's absolutely imperative that the uncertainty around RBS is dissipated," he told the newspaper.
The government will conclude a review this autumn into whether RBS should be split up, while Business Secretary Vince Cable told a newspaper earlier this month the bank was unlikely to be reprivatized before 2018. Continued...