News round up: RBS, Britain's credit rating, Royal Dutch Shell, financial stability, Amazon and RIM.

Royal Bank of Scotland Group plc (LON:RBS) has moved to quell staff fears over the state-backed lender's plans to shut down large parts of its investment banking division. In an internal memo to staff in the bank's global banking and markets (GBM) business seen by The Daily Telegraph, RBS said it realised the prospect of an overhaul of the division was "unsettling", but that "no decisions have been taken".

On Monday, George Osborne issued his most direct order to RBS, which is 83pc owned by the taxpayer, that it must scale back its investment banking business. Announcing the Government's response to the Independent Commission on Banking's final report, the Chancellor said RBS's future was as a "major UK bank" and that it should reduce its "riskier activities".

RBS's GBM unit employs 18,900 people, mainly based in London, though the bank continues to maintain sizeable investment banking operations in the US and Asia. The bank was already in the process of cutting the size of its investment banking operation. In a statement the bank said it was adjusting the business "in line with changing market conditions", writes the Telegraph.

Britain's credit rating

Ratings agency Moody´s warned last night that Britain's credit rating could be cut if the euro crisis worsens, The Telegraph reports. In a statement, Moody’s Investors Service said: “The currently stable outlook on the UK government’s AAA rating depends in part on the assumption that the government will stay on track with its fiscal consolidation programme.

“However, any additional weakening in the macro-economic outlook or a need to support the banking system could temporarily set back the government’s fiscal consolidation efforts. As a result, the outlook on the rating is likely to be sensitive to future developments in the euro area’s debt crisis, even though the UK is not a member of the monetary union.”

Royal Dutch Shell

Shell has suspended drilling at one of its Gulf of Mexico discoveries after spilling 319 barrels of drilling fluid just 26 miles from the site of BP’s fatal disaster. The Anglo-Dutch company said that it had temporarily abandoned the well while it carries out repairs. It said that the leak of chemicals, which can cause cancer, came from the rig’s “booster line” which provides extra drilling fluid and is not connected to the well.

Shell had only just begun drilling its Appomattox prospect after getting the go-ahead in May from the Bureau of Ocean Energy Management, Regulation and Enforcement, the new US drilling regulator. It was its first new exploration plan approved since BP’s spill last year, which resulted in a moratorium on drilling in the Gulf, The Times says.

Financial stability

One of the biggest threats to financial stability in the UK is potential interference by the European Union (EU) that would create a "race to the bottom" between regulators, the Bank of England has warned, according to The Telegraph. Brussels has demanded that key banking regulations are set centrally, making national supervisors little more than arms-length officials policing the EU code.

However, in a discussion paper on the new "toolkit" of powers the Bank is requesting to prevent a rerun of the financial crisis, it warned that Brussels was proving an obstacle to reducing systemic risk. The Bank also appeared to endorse David Cameron's decision to veto the revised EU treaty after failing to secure additional safeguards for independent UK financial regulation.

Amazon and RIM

Amazon hired an investment bank to review a potential merger with RIM, but was rebuffed because the BlackBerry maker wanted to fix its problems on its own. Although Amazon sought advice from the investment bank this summer, it did not make a formal offer, a source told Reuters. It is not clear whether informal discussions between Amazon and RIM ever led to specific price talk, or who else had approached RIM about a takeover.

RIM's board wants co-chief executives Mike Lazaridis and Jim Balsillie to focus on trying to turn around the business through the launch of new phones, better use of assets such as BlackBerry Messaging and restructuring, two sources said, The Telegraph comments.