MPs hear RBS should be split in two for sale

Tim Wallace
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RBS should be broken up to make it easier for the government to sell the bailed out bank, former policymaker Adam Posen said yesterday.

The ex-Bank of England Monetary Policy Committee member told a committee of MPs and peers that selling simple units of the retail banking and investment banking arms could be a better option than offering up the whole institution.

The suggestion comes as RBS considers splitting the leadership of its investment banking arm.

It is thought that current boss John Hourican could be pushed to take the blame for Libor fixing, not because he was involved or knew about the bad behaviour, but simply because he was a senior figure in the relevant part of the bank at the time.

One possible option for dealing with the arm after his departure could be to cut out a layer of management, leaving the heads of the markets arm and the institutional banking unit reporting directly into the board.