ABSTRACT
Through its acquisition of NatWest Bank, Royal Bank of Scotland (RBS) had become one of the world's largest banks. This acquisition was considered at the time to be a masterstroke of strategy and execution and a sign of the chief executive officer (CEO) exceptional skill. At the end of 2008, with total assets of over $3.5 trillion, the RBS was the largest bank in the world by assets and the fifth largest by market capitalization following a series of major acquisitions, climaxing in the acquisition of ABN AMRO in late 2007. The failure of RBS in October 2008 gave rise to what the UK Treasury described as 'the biggest bail-out in history'. The Financial Services Authority (FSA) report describes a series of failures and misjudgements in supervision ranging from the failure to analyse and understand balance sheet risks relating to capital, liquidity and asset quality, to the decision not to intervene in RBS's foolhardy acquisition of parts of ABN AMRO.
