Since 2005 the UK has used the rules of the International Financial Reporting Standards (IFRS) to govern its accounting, but this method has now been deemed "fatally flawed".

Under the new rules RBS were allowed to report a 2010 core tier one ratio more than four per cent higher than what it would have been under the UK's old Generally Accepted Accounting Principles (GAAP) rules.

At the moment RBS has a core tier one capital of 10.7 per cent, and tangible shareholder assets of £58bn. However under the old GAAP rules, RBS would have a core tier one capital of around 6 per cent, and tangible shareholder assets of only £33bn. This is not necessarily a problem with RBS' accounting however.

The discrepancy between the two figures has drawn attention to criticisms of the IFRS framework, which has been accused of potentially allowing banks to hide the accumulation of risks because distressed loans are not reported until they default.