Banking Crisis

RBS Given Waiver From Tough New US Capital Rules

Tom Burroughes, Group Editor, 15 January 2015

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Royal Bank of Scotland, which is in the process of slimming down its international operations including the offloading of its non-UK wealth management arm, will not need to meet tough new US capital rules on foreign banks, this publication can confirm.

Royal Bank of Scotland, which is in the process of slimming down its international operations including the offloading of its non-UK wealth management arm, will not need to meet tough new US capital rules on foreign banks, this publication can confirm.
 
The US Federal Reserve said it has approved a request by RBS, which is currently majority-owned by the UK taxpayer, to be exempted from requirements to form a US intermediate holding company by July 2016. The requirements will apply to all non-US banks with more than $50 billion of US assets and require banks such as Barclays to form separate holding companies with capital and reporting requirements, media reports, which were later confirmed to this publication, said.

Reports said the Fed did not give a reason for its waiver decision or go into details about the requirements.

RBS is cutting back on some international business, such as in Asia, and has announced it intends to spin off its non-UK wealth management business, Coutts International. The bank has been state-owned since the 2008 financial crisis and the present UK coalition government wants the bank returned to the private sector, although specific timings haven’t been set. Other European banks rescued by their governments, such as those of ABN AMRO and ING in the Netherlands, for example, have had to restructure as a condition under European Union rules of receiving bailouts.

Last year, Edinburgh-headquartered RBS sold 29 per cent of its US bank Citizens and intends to reduce its stake further.

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