Breaking up, but afore…?
Dismantling a bank is the privilege of the owner; no doubt and it will be necessary.
Prior to that however, the new owner’s accountancy has the responsibility to take provisions for any risks of the new asset(s). It will be interesting to see what kind of provisions Alistair Darling will have foreseen in the budget on the 22nd of April for all of our new shareholdings in the likes of RBS. Knowing that 70% ownership and rising, does indeed result in full responsibility for any kind of risk within the balance sheet he should by now be in a position to declare and define such risks and take provisions:
“The background … is that Royal Bank's balance sheet is considerably bigger than the total output of the British economy and it liabilities are considerably great (sic) than the entire public-sector debt of the UK.”
(Peston Picks bbc.co.uk 9th April 2009)
It is a qualified assumption that realistic provisions would be the overkill for any budget, hence, it is likely those provisions will undoubtedly not be seen as a breach of any basic accounting rules; in return this will again and even more spectacularly demonstrate how artificial the system – for financial institutions among others – has become where budgets are based on arbitrarily bendable balancing rules, shadow budgets and resourceful loop holing.
Equality of opportunities?