RBS to require new bailout?

7 October 2011

Fears are mounting that another bailout may be required for Royal Bank of Scotland (RBS).

The Financial Times reports that there is growing unease at the thought the UK government might need to inject additional capital into the lender in a bid to recapitalize the banking system in Europe.

According to the newspaper, RBS - which was founded in 1727 - is one of a number of financial institutes that may see its core tier one capital ratio dipping below regulator requirements when the exposure of banks to the eurozone periphery is further investigated.

A government official told the news provider: "[RBS's] sovereign exposure is not fundamentally worrying but if there is a broader European drive to recapitalise the banks it's conceivable they may need more government money."

Deutsche Bank, Societe Generale, Commerzbank and UniCredit were the other lenders to have stress test results beneath seven per cent but above the minimum level.

By Asim Shah

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