Osborne 'Regrets' Lack Of Radical RBS Reform

The Chancellor has admitted he regrets not beginning a radical restructuring of Royal Bank of Scotland (LSE: RBS.L - news) (RBS) following the last General Election.

George Osborne also told the Financial Times he would look to "get rid of" the taxpayer's "massive" 80% stake following the coming election, should he remain in the post, but warned the process may take many years.

He said: "First (Other OTC: FSTC - news) , it's not an exact science but on some measures it's bigger than all the privastisations of the 1980s put together.

"Second, I think people want to get their money back. The British taxpayer wants to feel they haven't suffered some enormous loss.

"So there are constraints around it but it's certainly something I would want to get moving on in the summer after the election."

One option Mr Osborne ultimately ignored was a recommendation to break-up RBS - favoured by the business secretary, Vince Cable in 2012.

In 2013, RBS created its own so-called 'bad bank' to hold billions of pounds of its most risky assets.

Mr Osborne was instrumental in determining the bank's new focus on UK retail and corporate banking, having overseen the departure of chief executive Stephen Hester in favour of Ross McEwan.

Mr McEwan told Sky News earlier this week he would not put a number on an FT report that the bank was planning to shed 14,000 of its 18,000 investment banking jobs as it moves to shrink operations in the US and Asia.

The Chancellor's efforts to sell-off the Government's stake in RBS may be hampered by its share price.

It is currently trading at 377p per share, well short of the 455p average needed to recover the £45bn spent propping up the bank in 2008.

Any Government would be under pressure to secure a profit for the taxpayer - something which has been achieved so far with the slow disposal of Lloyds shares.

The bank revealed last week it remained loss-making in 2014 and Sky News has learned its remuneration report , due to be released later on Friday, will show it continues to pay dozens of staff more than £1m annually.