RBS To Slash Jobs From Its Mortgage Business

Royal Bank of Scotland is reportedly planning to shrink its mortgage trading business by two-thirds over the next two years, due mainly to new rules set out by the U.S. Federal Reserve that require stronger capitalization for mortgage firms to protect against potential losses.

The bank will cut hundreds of jobs in the U.S., mostly in its non-agency mortgage business, but is expected to retain its securitization and agency mortgage business, the Financial Times reports.

The Federal Reserve in February adopted tight new rules for foreign banks – as per the Dodd-Frank Act – to shield U.S. taxpayers from bailouts. Foreign banks with $50 billion or more in U.S. assets are now required to set up an intermediate holding company subject to the same capital, risk management and liquidity standards as U.S. banks.

The cuts could result in the elimination of up to 400 jobs, according to a Reuters report. RBS' U.S. business employs a total of about 2,400 people.


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