Is the UK government about to offload banking share stakes?
The UK government is today under pressure to begin disposing of taxpayer share stakes in Royal Bank of Scotland and Lloyds bank after this week's results season began. The stakes are now in profit to the tune of around £5 billion although there is a growing consensus that now may well be the time to begin reducing UK taxpayer exposure. So is now the right time to sell?
The truth is that there is no way to tell the future of the UK banking sector or the UK economy. All that we know is that today taxpayer share stakes in Royal Bank of Scotland and Lloyds bank are in profit to the tune of around £5 billion, after suffering enormous paper losses in recent months. While many people are expecting the UK government to step forward and confirm plans to dispose of the share stakes, why would the government let the market know ahead of any potential sale?
In reality, the UK government would be unlikely to give the market much warning of any potential share stake sales if indeed the government does decide to drip shares into the market - this would effectively push down the price of the shares in question because of the expected sale.
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