The US Federal Reserve has granted a waiver to the Royal Bank of Scotland (RBS) from stringent rules, which will come into effect from 2016 for foreign banks.
By the time the new rules take effect, RBS plans to reduce its US assets to below $50bn by shrinking its US investment bank, reports Reuters.
The ‘Regulation YY’ will require foreign banking companies to set up separate US holding companies with stringent capital as well as reporting requirements.
No specific reason has been given by the Federal Reserve for its waiver decision.
Before the 2007/09 financial crisis, RBS was one of the world’s largest banks. However, during the crisis, it needed a taxpayer bailout in 2008. Currently, the UK government holds 80% stake in the bank.
The Edinburgh-based bank is reducing its foreign operations and is focusing only on UK business, reports Reuters.
British banking and insurance holding company RBS operates various banking brands offering personal and business banking, private banking, insurance and corporate finance through its offices located in Europe, North America and Asia.
In the UK and Ireland, its main subsidiary companies are The Royal Bank of Scotland, National Westminster Bank, Ulster Bank and Coutts.
Image: The Royal Bank of Scotland’s office in London. Photo: courtesy of Astrotrain