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Royal Bank of Scotland set for serious clearout

It has been revealed that Royal Bank of Scotland is on the verge of ditching a number of non-executive directors in the aftermath of a dire period in the company's history. The company is expecting to announce losses of £28 billion from 2008 and undergo a serious reorganisation of the business. While the vast majority of non-executive directors will be leaving the board, their departure will be structured in such a way as to arrange replacements before the board is weakened yet further.

Stephen Hester, who took over from Sir Fred Goodwin in 2008, is set to slash 30,000 jobs from the business and reorganise the company's balance sheet and liabilities to bring them more into line with the general banking sector. The reduction of the risk associated with the bank's balance sheet will effectively retrench the business as a smaller going concern with less risky financial instruments.

There are also reports that Royal Bank of Scotland is set to place between £50 billion and £100 billion of "toxic loans" into the government's new bank insurance rescue package. As more and more banking companies are set to follow the lead of Royal Bank of Scotland there are serious concerns about the total liabilities which taxpayers are being asked to fund at a time when the economy is effectively in freefall.

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