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Rock Street, San Francisco

                The
collapsing bank situation has made the UK government in taking over the RBS
which caused them the need to survive in that situation and thus, making it a
clear thing that by early 2008, the financial system was at real risk of collapsing.
On Tuesday 7th of October, a recapitalization was made. The issues
were huge that it was necessary to do a recapitalization. The Treasury, the
Bank and FSA discussed the issue regarding the bank collapsing situation and
decision making in the recapitalization in a very serious manner. Along with
the recapitalization, the process in which they had finally made the decision,
was extensive, very complicated thus, making them work long hours and parties
were interested in involving themselves to the decision making situation.  A plan of recapitalizaion was made by the
Prime Minister and the Chancellor as well as making a joint press conference in
an early hour on Wednesday 8th of October. Besides making a plan and
joint conference, a statement to the house was also made on that day. In the
plan that they had discussed, qualified banks under the Special Liquidity
Scheme (SLS) would be receiving the availability in funds since the bank would
be increasing it along with starting a Credit Guarantee Scheme (CGS) which is
started by the Treasury in order to motivate qualified banks to lend each other
and contribute capital to those qualified banks that needed recapitalization.
UK banks had finally raised £37 billion in capital support which was announced
by the Chancellor n 13th of October. £20 billion of savings was
obtained by the Treasury, ), £12 billion by Halifax Bank of Scotland (HBOS) and
£5 billion by Lloyds TSB. In managing the investments in Royal bank of Scotland
Group, UK Financial Investments Ltd (UKFI) was also set by the government.

Royal Bank of Scotland finally collapse to
the edge in 2008 by owing to the recent global financial crisis that trigger
the entire United Kingdom’s financial sector after a long period of successfulness
in the global banking industry. The failure that was caught by RBS, which also
occur because of the poor decisions that RBS’s management and Board made, is
forcing the UK citizens in paying large amount of costs. This forced payment
that’s done to the UK citizens by RBS is only the tip of the ice berg in causing
the financial crisis. RBS’s role in the global financial crisis situation has
also resulted in the recent downturn of 2008, thus creating imposed payments on
the UK citizens. While the Great Depression of 1930’s was told to be bad, but
apparently the downturn of 2008 was regarded to be the “worse” in the global
financial crisis situation.  2-2.5% was
supposed to be the growth number of the UK economy in 2008 and 2.5-3% in 2009
and 2010 but lucky was not on their side because the growth in 2008 was less
than 1% (UNISON, 2008). Besides the poor growth in 2008, a GDP contraction of
2.6% was actually predicted in 2009 (Sentence, 2009) thus, indicating their
horrible performance. This downturn was regarded to be the worst in the last 70
years by means the RBS had experience major downturn in 2018 and reached the
edge in a matter of seconds which caused huge problems in the economy such as unemployment
for many and even losses of income and wealth.

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