There are reports today that the government is going to write about £7 billion off its valuation of its 73% shareholding in RBS. This would leave a remaining worth of about £15 billion.
The write-off recognises three things. The first is that the 503p a share price paid for RBS in 2008 will not be recovered. The second is that the 330p price at which a block of shares was sold by Osborne was wildly over-priced. And third, neither value is likely to be seen again for a long time.
All such views do however miss the fundamental point about RBS, which is that it is not just a failed bank but that it is the exemplar of a failed banking system. There is no solution to RBS that involves sale, flotation, giving it away as helicopter money, or anything else. Instead, as I recall writing way back in Ocober 2008, RBS has to be stripped of all its peripheral activities (including investment banking in its entirety) and instead be prepared, under full state control, as the platform on which new regional banks can be built.
These would have three roles. The first is a secure and simple place to bank without pressure to buy extraneous products, all provided at a fair price.
Second, this would be the home of National Savings, including new local bonds, and pension and ISA products based on them.
And third it would be the delivery mechanism for the local activities of a new Natioonal Investment Bank.
And if we do leave the EU this could all be done without problem. And if we don't a local franchise operation on top of a central, uniform, banking platform should solve any competition issues.
And all for a modest outlay to buy out the remaining private sector investors with the chance to reform the whoke of banking as a prize.
Surely someone has to grab the possibility? It could even give Scotland its own bank once again, after all, and something long gone in the rest of the country, which is a trusted bank. Is that too much to hope for?