UK finance minister Osborne backs RBS bad bank plan

Britain's finance minister George Osborne said on Friday he wholeheartedly supported plans by Royal Bank of Scotland to create an internal bad bank to manage the run-down of its riskiest assets.

"Under this new direction RBS will deal decisively with the problems of the past by separating out the good from the bad, and putting the bad loans in a bad bank," Osborne said in a statement.

The Treasury statement also said that taxpayers' exposure to the banking system had been reduced by 8 billion pounds ($12.85 billion)as a result of the structural changes.

(Reporting by William James; Editing by Steve Slater)