Royal Bank of Scotland Implodes; ‘Depression’ Like the 1930s Foreseen

The Royal Bank of Scotland (RBS) will reportedly soon announce it will be cutting many thousands of jobs amid financial losses of tens of billions. The majority government- owned bank was recently so highly leveraged that, though essentially worthless, its  nominal capital value was greater than the world’s greatest corporations.

The blunt report on the RBS appears on the Advice page of the website for the Shepherds Friendly Society Ltd, a very old and respectable UK mutual insurance company, as follows:

“It has been revealed that [the] Royal Bank of Scotland is set to announce one of the most severe cost-cutting exercises in the history of the UK banking sector. If the rumours are correct, this week could see between 10,000 and 20,000 job cuts at Royal Bank of Scotland, which would decimate the workforce. The company is set to announce losses rumoured to be approaching £30 billion after severe write-downs on its loan book and a marked constriction of its business activities.”

“… As we see tens of thousands of job cuts announced by [rbs] and the other leading UK banks, many people are starting to wonder how business could collapse in such a short space of time and affect so many people.

“Unfortunately, this is the world we live in today, a world where the economy of the UK is under severe threat and on the verge of a possible depression if rescue packages and stimulus programs do not kick in very soon. While mention of the `D’ word has effectively been banned by the authorities, more and more analysts are starting to look at the comparisons between now and the 1930s (the great U.S. [sic] depression).”

Bloomberg News had reported November 12, that RBS plans to “eliminate [up to 14,000] jobs at its corporate and institutional bank … and exit [from 25] countries worldwide to cut annual costs [by about 80%] to between 700 million pounds and 800 million pounds … from 3.6 billion pounds….” But that earlier Bloomberg report claimed the RBS cut would occur gradually, over three years, and was designed to “return the bank to profit.” The financial weather has turned black since then.

Deutsche Bank—in reality a British bank, essentially UK-based—is pulling out of 10 countries and laying off 26,000 employees. Deutsche Bank shares hit a four-year low on Dec. 14, and the total monetary worth of its stock shares has recently plummeted, as have those of Standard Chartered Bank and Credit Suisse.