Mark Carney: “Royal Bank of Scotland Needs a Clear Plan”

Back to the Future Feature

Bank of England governor Mark Carney recently told British newspaper The Daily Mail that Britain needs to clarify its long-term plans for the Royal Bank of Scotland (NYSE:RBS).

Carney’s sentiments are in-line with the beliefs of his predecessor, Mervyn King, who believed that uncertainty over the Royal Bank of Scotland’s future was damaging the bank’s ability to sustain lending. In 2008, the government of Britain injected 45.8 billion pounds into the Royal Bank of Scotland in order to save it from collapse. The government now holds an 81 percent stake in the bank.

“It’s absolutely imperative that the uncertainty around RBS is dissipated, absolutely imperative,” Carney said. But while he explained that banks now “have improved the infrastructure and the transparency in bank reporting, he admitted that where banks “still need to make a lot of progress is in the derivatives markets, huge markets, multi-trillion markets.”