Quote
U.K. Will Examine Deputy Premier Proposal to Give Away RBS, Lloyds Shares
By Robert Hutton and Thomas Penny - Jun 23, 2011 7:30 AM PT
A proposal to give every British voter shares in the part-nationalized Lloyds Banking Group Plc (LLOY) and Royal Bank of Scotland Group Plc (RBS) is one of a number of ideas under consideration, Prime Minister David Cameron's office said.
Deputy Prime Minister Nick Clegg floated the idea during a visit to Brazil. He told the Financial Times newspaper he had written to Chancellor of the Exchequer George Osborne and Chief Secretary to the Treasury Danny Alexander this week, asking them to consider the case for a "mass share-ownership scheme."
A proposal drawn up by Portman Capital Partners and backed by Liberal Democrat lawmaker Stephen Williams in March would see about 75 percent of the publicly owned shares in the two banks being distributed to all 45 million U.K. registered voters.
"This option has been put forward as an idea and it's one we will look at," Cameron's spokesman, Steve Field, told reporters in London today. "It's taxpayers' money that was used to bail out these banks, and when thinking about how we dispose of those bank shares we need to make sure we get best value for taxpayers."
Under the Portman blueprint, individuals who hold the shares would be allowed to keep any gain above a floor price of at least 51 pence ($0.83) per share for RBS and 74 pence for Lloyds, the amount the government paid when it bailed out the banks in 2008. The Treasury would receive the proceeds up to the threshold. That would deprive it of any profit from the rescue.
The government owns 83 percent of Royal Bank of Scotland and 41 percent of Lloyds after pumping in almost 66 billion pounds to bolster their capital during the financial crisis.
Bailout Costs
RBS fell 5.1 percent to 36.7 pence at 3:23 p.m. in London. Lloyds declined 3.4 percent to 45.42 pence.
Clegg's fellow Liberal Democrat, Business Secretary Vince Cable, described the idea as "a very constructive step," before pointing out that any selloff was "several years hence."
Speaking to BBC television, Cable said the privatization of British Gas in 1986, when individuals were encouraged to become shareholders, is a model that "in a more ambitious way could be applied to the banking system."
Clegg himself told the FT the proposal could prove "insuperably complex."
"I don't see how this idea puts cash in the government coffers," Joseph Dickerson, banks analyst at Espirito Santo Investment Bank in London, said in a telephone interview. "And what does the average person know about the valuation of a bank and when to sell? Should higher-rate taxpayers get more shares?"
'Blue-Sky Thinking'
Conservative lawmaker Mark Field, whose parliamentary district includes London's financial center, described Clegg's proposal as "an absolute non-starter."
"It's the bluest of blue-sky thinking," he said by phone. "Once you have uncertainty hanging over the future ownership of the banks, it could take them longer to regain their value. Any divestment needs to be driven by economic not political considerations."
The idea was also attacked by the opposition Labour Party.
"The test for what happens to the nationalized banks must be the long-term best interests of the taxpayer, not the short- term need to get headlines for Nick Clegg's overseas trip," Labour's Treasury spokesman Ed Balls said in an e-mailed statement. "The government needs to urgently explain what impact this proposal will have on the public finances, what the administration costs are estimated to be, how the scheme would work and what effect it would have on the balance sheets of the banks."
Cameron's spokesman said projections produced by the fiscal watchdog, the Office for Budget Responsibility, do not include estimates for income from the sale of shares in RBS and Lloyds as it can't be quantified "with reasonable certainty."
http://www.bloomberg.com/news/2011-06-23/u-k-to-look-at-clegg-proposal-to-give-away-rbs-lloyds-shares.html
But will they tax the capital gains?? :P
Quote"And what does the average person know about the valuation of a bank and when to sell?"
Well, between the dot-com boom and the 2008 financial meltdown, the pros didn't exactly serve a ringing endorsement of their skills either. :p
Bit early for an election bribe. :hmm:
You know what you do with a nationalized bank?
YOU FUCKING SHUT IT DOWN.
Jesus. Sell the fucking deposit accounts to, you know, SOLVENT institutions, and fuck these banks. Jesus. Doesn't the UK have bankruptcy laws?
Quote from: Warspite on June 23, 2011, 04:42:08 PM
Well, between the dot-com boom and the 2008 financial meltdown, the pros didn't exactly serve a ringing endorsement of their skills either. :p
My understanding is the pros did quite well during and after the dot.com boom.
Quote from: Scipio on June 23, 2011, 06:31:41 PM
You know what you do with a nationalized bank?
YOU FUCKING SHUT IT DOWN.
Jesus. Sell the fucking deposit accounts to, you know, SOLVENT institutions, and fuck these banks. Jesus. Doesn't the UK have bankruptcy laws?
Lloyds and RBS are huge. We're not talking a little small town bank going out of business here but massive multinationals which are simply too big to fail without messing up the economy.
'Cause, like, you know, the economy's not already screwed up or nothin'.
Quote from: Tyr on June 23, 2011, 06:39:42 PM
Quote from: Scipio on June 23, 2011, 06:31:41 PM
You know what you do with a nationalized bank?
YOU FUCKING SHUT IT DOWN.
Jesus. Sell the fucking deposit accounts to, you know, SOLVENT institutions, and fuck these banks. Jesus. Doesn't the UK have bankruptcy laws?
Lloyds and RBS are huge. We're not talking a little small town bank going out of business here but massive multinationals which are simply too big to fail without messing up the economy.
Too big to fail is a fiction. We have saved all the companies that are too big to fail, without the massive beneficial effects predicted. In fact, the result of saving these companies exceeds some of the nightmare scenarios of letting them fail. WTF? Too big to fail=if you can vote yourself anything you want, you will.
Too big to fail may in fact be a fiction, but by the same token if the size gets large enough that would require chopping the institution into seperate parts before reselling, and I cannot think of a precedent for that. It would definitely not be as (relatively) clean and simple as selling the whole shebang to somebody big enough to digest it.
The Royal Bank of Scotland is nationalized, and then it is distributed to the voters, the majority of whom are English. Nick Clegg is just a modern day version of Edward Longshanks. Mel Gibson won't stand for this.
I like the idea. The proposal from Centre Forum has it so that when people sell on the Treasury takes enough to break even on nationalising the banks.
QuoteYOU FUCKING SHUT IT DOWN.
Jesus. Sell the fucking deposit accounts to, you know, SOLVENT institutions, and fuck these banks. Jesus. Doesn't the UK have bankruptcy laws?
We've not got much competition in our banking sector. There are about five banks that cover almost the entire population (I bank with NatWest, owned by Royal Bank of Scotland). EU competition law's requiring that Lloyds be forced to sell off a chunk to another new bank so we'll have six big banking groups.
Also British people don't change their banks very often so even within the five there's not much competition.
Quote from: dps on June 23, 2011, 06:53:53 PM
'Cause, like, you know, the economy's not already screwed up or nothin'.
It could be worse. See also: Greece
QuoteToo big to fail is a fiction. We have saved all the companies that are too big to fail, without the massive beneficial effects predicted. In fact, the result of saving these companies exceeds some of the nightmare scenarios of letting them fail. WTF? Too big to fail=if you can vote yourself anything you want, you will.
UK being a country which is bailing out failing countries rather than a collapsing shithole itself is quite a big beneficial effect.
I certainly agree with the recent talk of chopping them up a bit and especially forcing banks to seperate their money making schemes from their banking however. Just because we were in this situation and chose the least bad choice doesn't mean we want to be in it again.
Quote from: Tyr on June 25, 2011, 06:51:57 AM
Quote from: dps on June 23, 2011, 06:53:53 PM
'Cause, like, you know, the economy's not already screwed up or nothin'.
It could be worse. See also: Greece
QuoteToo big to fail is a fiction. We have saved all the companies that are too big to fail, without the massive beneficial effects predicted. In fact, the result of saving these companies exceeds some of the nightmare scenarios of letting them fail. WTF? Too big to fail=if you can vote yourself anything you want, you will.
UK being a country which is bailing out failing countries rather than a collapsing shithole itself is quite a big beneficial effect.
What exactly has it gotten the UK?
Quote from: Scipio on June 25, 2011, 06:52:45 AM
Quote from: Tyr on June 25, 2011, 06:51:57 AM
Quote from: dps on June 23, 2011, 06:53:53 PM
'Cause, like, you know, the economy's not already screwed up or nothin'.
It could be worse. See also: Greece
QuoteToo big to fail is a fiction. We have saved all the companies that are too big to fail, without the massive beneficial effects predicted. In fact, the result of saving these companies exceeds some of the nightmare scenarios of letting them fail. WTF? Too big to fail=if you can vote yourself anything you want, you will.
UK being a country which is bailing out failing countries rather than a collapsing shithole itself is quite a big beneficial effect.
What exactly has it gotten the UK?
An unemployment rate which remains in the single figures, talk of the economy recovering rather than talk of how bad will things get, etc....
We're in a much better state than the collapsing countries.