Bank of Scotland To Close Its Bad Bank

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    Bank of Scotland

    Formed as The Governor and Company of the Bank of Scotland in 17th century, it became Bank of Scotland plc on 17 September 2007.

    This bank is the pride of Scotland and rather whole Europe. It is the only commercial institution formed by the Parliament of Scotland.  It was one of the first banks in Europe to print its own banknotes.

    But since the world economic crisis in the year 2007, the bank has stop showing the growth and glory it once had.

    Royal Bank of Scotland has finally shuttered its so-called bad bank. It  was built up to take care of the toxic assets originated due to the after effects of 2008 financial crisis.

    This move is just an another step taken by the bank and government to help recover it from the crisis it is facing.

    In the budget session held last week, government decided to sell its stake in the bank. Government will be selling 72% stakes that it holds by the year 2023. The stake will be of value worth £15bn.

    Recently, RBS passed the Bank of England stress test. The bank had to close its capital resolution division when government bailed it out, in order to stay solvent.

    RBS chief executive Ross McKewan stated his opinion by calling this step as the “key moment”. He further said that the bank took a decade to come back the state where it is now.

    However, one of the concerns of the bank is to meet the fine amount charged by the US Department of Justice in relations to the claims made that the bank mis-sold mortgage bonds in the 2008  crisis.

    The bank may have to solve this issue before the government can start to sell its shares.

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