INSIDE RBS, THE BANK THAT BROKE BRITAIN.

INSIDE RBS, THE BANK
THAT BROKE BRITAIN

INTRODUCTION
 Royal Bank of Scotland, considered as one of the biggest bank in its time having assets
worth greater than $3 Mn and employees strength of more than 200000 almost collapsed
the economy of Britain.
 Mr Fred Goodwin, the CEO of the company is considered to be one of the chief architects of
the catastrophic financial crises that happened in Britain.
 Ian Fraser in his book “Shredded: Inside RBS, The Bank That Broke Britain” revealed the
inside story of the financial saga.
 The book was named the book of the year by Financial Times, Bloomberg, The Week and
Huffington Post and one of best books of the decade by the Financial Times.
 The book also reveals that Goodwin was especially not a likeable man for his ruthless
leadership which also helped in growing the ancient, small, traditional and conservative
Scottish clearing bank to one of the largest bank in UK.

MAIN REASON FOR THE COLLAPSE
 The bank paid out billions of the bonuses annually
 It further announced and distributed bonuses on the unrealized profits which led to
losses.
 Misselling financial products to the customer for sake of profits, thereby disregarding
the interests of the customers, bank and society as a whole
 RBS also took acquired ABN Amro in an ill-conceived deal of €71.1bn, which was
financed through debt. RBS failed to pay off the same later.
 Flaw in the risk assessment and reckless risk taking without sufficient pre
assessment.
 Auditors Deloitte were also reluctant to challenge the deceptive accounting of the
company.