Announced in January 2009, the Scheme aimed to provide financial stability by protecting the Royal Bank of Scotland (RBS) against certain exceptional losses. The Treasury considered a variety of options to achieve this including public ownership and purchases of banks' assets. Having opted for an asset protection arrangement, the Treasury maintained flexibility by allowing several months for detailed due diligence before it finalised the agreement. The Treasury designed a series of stress tests to calculate a range of possible losses under different economic scenarios, to help set loss protection conditions at a level that gave RBS an incentive to manage its assets effectively. It took a conservative approach to uncertainties where the Treasury judged RBS had not provided sufficient data, it did not allow assets into the scheme and the risk remained with the RBS. The due diligence period resulted in significantly tighter terms than those originally proposed. We found that, with one exception relating to potential fees, the Treasury had conducted a robust assessment, and while the long term outcome of the scheme cannot be foreseen, it had, to date, contributed to its overriding aim of financial stability.