The near collapse of the Royal Bank of Scotland was due to poor decisions made by those in charge of the bank and flaws in regulation, the Financial Services Authority (FSA) says.
A report by the FSA detailing the failures of the part-nationalised bank has given full details on why the bank's problems led to a £45.5 billion rescue plan.
In 2007 RBS had to be rescued by the government after nearly collapsing due to the failed acquisition of Dutch lender ABN Amro, under the management of Sir Fred Goodwin.
The FSA report says the bank was too weak to proceed with the takeover of the Dutch bank and it left it "extremely vulnerable to failure".
It said senior banking staff needed to prioritise risk management over profits, and future regulators should be given more power to block takeovers.
FSA chairman Lord Adair Turner says: "The report also reinforces the conclusion that the global capital standards applied before the crisis were severely deficient and liquidity regulation was totally inadequate.
"These were decisions for whose commercial consequences the RBS executive and board were ultimately responsible."
On 2 December 2010, the FSA issued a short statement explaining what happened to RBS but said, for legal reasons, it was unable to publish more detailed findings. The Treasury Committee argued that without full publication of the FSA's findings, the public could not have confidence that the necessary regulatory lessons had been learned.
In response, the FSA agreed to prepare this report summarising the bank's failure and the FSA's response to it.
Chairman of the Treasury Select Committee Andrew Tyrie says it was unacceptable for the public to be "brushed off with a single page of explanation from the FSA about the failure of RBS in exchange for the billions of pounds taxpayers put at risk to save the bank from collapse".