The FT has reported:
Despite lifting its shareholding in RBS to 70 per cent yesterday, the government is desperate to avoid nationalising another bank and saddling the Treasury with RBS's £2,000bn ($2,900bn) balance sheet and political responsibility for the bank's lending policy.
"We have a clear view that British banks are best managed and owned commercially and not by the government," Alistair Darling, chancellor of the exchequer, told the House of Commons.
Which is ludicrous. The market has failed. Now it is time for alternatives.
Has he ever thought about mutualising RBS? One account holder one vote? Why not? Let's create accountability - this is one way to do it.
Mutualisation had an extraordinary history of success until the madness of the 1990s destroyed so many of our mutual organisations. Why not go back to it?
The technology certainly allows for it! What do you think the voters would do with RBS?
The mutual building societies operate in the UK, whereas RBS is global, and rather large. The mutual building societies have relatively simple business models, operating mainly in retail. RBS has a complex and diverse business model. Although nationalisation looks increasingly likely it would only ever be short term; and you can understand the basis for the concerns over assuming all that risk, notwithstanding the open ended nature of the guarantees they are currently offering.
Why do you think the market has failed? Surely even you can see that it is Gordon Brown PLC that has failed. The market is still operating.
Richard
Although I often disagree with you on the issue of tax havens, on this issue, I do see where you are coming from although I think the banks are now in too deep for this to work.
I do think perhaps the definition of banking and the parameters in which banks are licensed to operate has to change. One way would be to licence banks to only carry out retail banking. This couldn’t happen in the past as the effect on shareholders returns would have driven down share prices (political suicide for government) however share prices now can’t go much lower and now is a perfect time to act.
Banks should take deposits and provide borrowing. Leave the fancy investment products to investment businesses, not banks!
If Government doesn’t take this course of action now, banks will commence their irresponsible business as soon as we are out of recession and their confidence returns.