RBS chief believes UK taxpayers should benefit
Royal Bank of Scotland chief executive, Stephen Hester, has today reiterated his opinion that UK taxpayers should benefit from the bailout of the UK banking system. Aside from the significant investments in Lloyds Bank and Royal Bank of Scotland, as well as Bradford and Bingley and Northern Rock, UK taxpayers have pumped billions upon billions of pounds into the UK money markets. Quite how the government and the Bank of England would be able to manage an overall return on this significant investment remains to be seen.
Interestingly, the very fact that Stephen Hester believes that UK taxpayers should benefit from their investment in Royal Bank of Scotland in particular has effectively warned investment markets about the potential share price level at which the UK government should look to reduce its stake. Whether this is a sensible move or not, i.e. to publicly comment on the potential share price sale level, is open to debate because it does somewhat tie the hands of the UK government and offers very little leeway.
While ultimately on paper UK taxpayers may well walk away from these banking sector investments with a profit we also need to appreciate how many UK companies have struggled over the last two years due to a lack of liquidity in the marketplace.
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