1 trillion dollars Royal Bank BUST
imagine giving every person in the world $500 us dollars.
imagine what that would do for health and education!
6 billion people, times $500 equals 3 trillion dollars.
Here is JUST ONE BANK of many hundreds....
The Royal Bank of Scotland earned the dubious honor of posting the largest annual loss in British corporate history on Thursday . a 24.1 billion pound ($34.4 billion) black hole fed by the bank's aggressive acquisition spree of recent years.
RBS will shift 240 billion pounds, or 20 percent, of its funded assets to a noncore division, along with 145 billion pounds of derivative balances and 155 billion of risk-weighted assets. Those assets will then be wound down over the next three to five years.
Royal Bank of Scotland posts record loss
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By JANE WARDELL . 2 hours ago
LONDON (AP) . The Royal Bank of Scotland earned the dubious honor of posting the largest annual loss in British corporate history on Thursday . a 24.1 billion pound ($34.4 billion) black hole fed by the bank's aggressive acquisition spree of recent years.
As the bank's new management team unveiled a sweeping restructuring and announced plans to dump hundreds of billions of pounds of toxic assets into a government insurance program, anger erupted over a 16 million pound pension pot bestowed on its disgraced former chief executive.
The very public downfall of RBS, a household name in Britain where it is heavily involved in the retail banking market, has been a lightning rod for much of the public disgust at mismanagement of major financial institutions by well-paid senior bankers.
"These historic and humiliating losses bring into sharp focus just how reckless RBS's former management team have behaved," said Derek Simpson, a spokesman for the Unite union. "The whole country is paying the price through job cuts and repossessions on a massive scale."
New Chief Executive Stephen Hester said the bank was "under no illusions" about the extent of the losses, which compared with a 7.3 billion pound profit in 2007.
Revenue fell 15 percent to 25.87 billion pounds, but the bank's losses were driven by a combined 12.8 billion pounds of credit market and trading writedowns that included exposure to the U.S. subprime market, the collapse of U.S. investment bank Lehman Brothers, the failure of Icelandic banks and the alleged Madoff investment scam.
"Put crudely, we need to manage ourselves better," said Hester, who warned that the coming year would be another difficult one for the 282-year-old bank.
Under the radical overhaul, RBS will shift 240 billion pounds, or 20 percent, of its funded assets to a noncore division, along with 145 billion pounds of derivative balances and 155 billion of risk-weighted assets. Those assets will then be wound down over the next three to five years.
Hester said the designated "bad" assets would be culled from a range of regions and businesses, but the bulk would come from the bank's underperforming Global Banking and Markets division.
The restructuring, which includes plans to cut more than 2.5 billion pounds from the bank's cost base, will leave the bank centered on Britain, with smaller, more focused global operations. It will leave some countries entirely while reducing its footprint in others, such as the United States where it plans to retain Citizens Financial Group, its 1,600-branch U.S. banking arm based in Providence, Rhode Island.
Hester declined to comment in detail on potential job losses but acknowledged reports of the bank shedding 20,000 positions, or 10 percent of its work force, were "not unreasonable."
The restructure will be supported by RBS' participation with another 325 billion pounds in the government's asset protection program, a step that could result in the state increasing its stake in the bank to as high as 95 percent.
RBS will pay 6.5 billion pounds to the Treasury to take part in the program, aimed at encouraging a return to lending by increasing the capital strength of banks. The cost will be funded by issuing new shares.
The government has agreed to take a new class of "B" shares worth 13 billion pounds, with the option for another 6 billion pounds worth.
Having already received 20 billion pounds from the government in earlier bailout packages, the new state funds will result in the government's stake rising to between 75 percent and 95 percent. The government has agreed to cap its voting rights at 75 percent under the program, which must be approved by shareholders.
Investors liked the overhaul, with the bank's shares soaring 25.5 percent to 29 pence on the London Stock Exchange. The stock has plummeted more than 90 percent over the past year.
Hargreaves Lansdown analyst Richard Hunter said that the market had welcomed the new board's attempts to draw a line under RBS' troubles.
"The various proposals put some more light between the current business model and the specter of full nationalization," he said. "Even so, the overall strategy must now be implemented amidst a further deteriorating economic backdrop, and it remains to be seen how RBS weathers this further storm."
Similarly, Manoj Ladwa, a senior trader at ETX Capital, said that the better-than-expected figures . analysts had factored in losses of up to 28 billion pounds . were of "little comfort .. when you have booked the biggest loss in UK corporate history."
"Although the share price is likely to rally today, a predominantly state-owned bank that is having a fire-sale on its assets gives investors little reason to buy," Ladwa added.
Much of the anger at RBS' predicament is focused on Goodwin, who engineered the expensive takeover of Dutch bank ABN Amro in December 2007 when its investment banking business was heavily exposed to the complex financial instruments hit by the crisis. ABN Amro was responsible for 55 percent of the losses announced Thursday.
Goodwin, 50, and former chairman McKillop both issued a public apology for their roles in the bank's downfall, but controversy continued to rage on Thursday with revelations that Goodwin . who was knighted by Queen Elizabeth II for services to banking in 2004 before his stewardship of RBS' aggressive expansion plans took the bank to the brink . is receiving a 693,000 pound ($992,000) a year pension.
"You cannot justify these excesses, especially when you have got such a failure of this magnitude," Treasury chief Alistair Darling told BBC radio.
Current Chairman Philip Hampton said he had asked Goodwin two weeks ago to voluntarily reduce his pension payments, but hadn't received an answer. Darling said his office had made a similar approach, admitting that the government had not realised that the government could have stopped the payout when it took majority control of the bank in October.
Climate change protesters demonstrate outside the headquarters of the Royal Bank of Scotland in London, Thursday, Feb. 28, 2009. The Royal Bank of Scotland posted a record net loss of 24.14 billion pounds ($34.4 billion) for 2008 the biggest in British corporate history and unveiled a massive restructuring program on Thursday that will hive off many of its international businesses. Britain's second largest bank, which has already been part-nationalized under bailout packages worth more than 20 billion pounds, also said it will offload 325 billion pounds of toxic assets into a government insurance program. RBS' huge annual net loss after minority interests and earnings from discontinued operations, compares with a 7.3 billion pound profit in 2007.The bank's pretax loss was significantly wider at 40.67 billion pounds, compared to a 9.83 billion pound profit the previous year.The bank's revenue fell 15 percent to 25.87 billion pounds