Instead of reducing loans on their balance sheets, which could starve the wider economy of credit, they should build up their capital reserves, possibly by tapping shareholders, the FPC added.
The bank's former directors include Sir Tom McKillop, who was RBS's chairman, and Sir Fred Goodwin, who orchestrated its expansion as chief executive.
While Deutsche Bank prefers to sell the division as a whole, the Frankfurt-based lender would also consider bids for parts of the unit, they said.
Los Angeles-based TCW, which had $114 billion in assets under management as of Sept. 30, may be valued at about $1 billion, one person said.
European bonds slumped after Germany failed to draw bids for 35 percent of the offered amount at an auction of 10-year bunds this week, stoking concern the region’s debt crisis is infecting even the safest sovereign securities.