RBS wins EU approval for U.K. bailout

European Union regulators have approved a British bailout for Royal Bank of Scotland PLC but warned that they will intervene if the bank doesn’t cut back its balance sheet by 2013.

RBS has agreed to sell off British branches and its insurance, transaction management and commodity trading operations to raise funds and compensate for the competitive advantage it gained from a 20 billion pound recapitalization from the British government.

The European Commission also approved RBS to take part in Britain’s asset protection scheme, where the state will cover 90 percent of potential losses from RBS assets once valued at 281 billion pounds.