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The redemption of RBS?

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The autumn of 2008 saw a financial crisis like no other; some of Britain's largest banks, including RBS and Lloyds, and indeed some of the largest commercial investment houses in the world all faced the same fate: absolute annihilation and bankruptcy.

Years of toxic debt coincided with the bursting of the property bubble. Not only did financial institutions have upon their financial portfolios future debts which would not be repayable, but current debts crippling both their businesses and the financial markets. This resulted in ensuing havoc for financial and firms and the stock market, and ultimately undermined market confidence.

At the height of the crisis in October 2008, the FTSE and the Dow Jones fell by 300 points a day. Not only were banks unable to do business but they were unable to rely upon market forces to rebalance trade, creating by far the deepest peacetime recession since the 1930s.
Alistair Darling, Chancellor of the Exchequer between 2007 and 2010, recorded in his memoirs that RBS had threatened turning of their ATM machines if the Government refused to come to their aid.

It was in this environment that Stephen Hester took the reigns of the Royal Bank of Scotland, the bank that before the global financial crisis had been the largest and most extensive retail bank in the world. Whilst his leadership has been seen as the saving grace of the bank, it came at the cost of approximately 40,000 job cuts and the halving of the bank's pay-roll.

Hester's predecessor, the former Sir Fred Goodwin, oversaw rapid expansion of the firm, into new markets and deeper into established ones.
RBS held shares in other banks, most notably ABN Amro, and it was in this climate - a bullish belief that the good times of the noughties boom would never end - that crisis took hold.

RBS, like many other banks, had become too big, too involved in failing businesses to expect them to make a full stock market recovery in such a small time, following such a seismic event as the global financial crisis is implausible.

Considering this, Hester's leadership can be seen to be somewhat valiant in his efforts to save the demise of RBS.
Hester has been responsible for and overseen RBS's near return to private ownership; soon it will no longer be dependent upon government money.
It is even more impressive to consider the political climate in which Hester's leadership of RBS has brought. Hester's boss has throughout been the Chancellor of the Exchequer. Both Darling and Osborne can be seen to have given considerable pressure from within Westminster in addition to constant fluctuations of international markets, rendering Hester's job significantly harder and highly politcised.

To say Hester steered the RBS ship away from choppy waters would be an understatement. Rather, Hester, along with the support of the government, helped raise a sunken ship; salvaging a business decimated by public anger and market failure, and made it respectable again.

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