http://www.independent.co.uk/news/uk/po ... 97525.html

Wouldn't know whether to laugh or cry.

I doubt that. £400 or so will either be sold and just used to pay down debt. That is what I would do with mine. Though would people be any more likely to vote for them in such a blatant election bribe?

That kind of bribery works which is why most governments do it the year before an election.

Is it a big enough bribe for you to vote for them?

Just a though but if every voter got the shares and then tried to sell them immediately then wouldn't the share price tank anyway so the shares would very rapidly not be worth £300 - £400.
I do like the prospect of the public actually owning the bank and having full voting rights at shareholder meeting s but realistically I'm not sure how many would actually make use of those powers. Assuming the share price didn't crash within the first week I suspect things would just carry on as normal so the government will have managed to offload RBS from the governments books and transferred the risk to the tax payer for the second time.

I've lost more than £400 a year every year they've been in office due to my pay not rising with inflation.

Jon

I don't want no steenkin' shares. Give me the cold hard cash. At least that would be useful.

Pr!ck wants to bribe me with my own money?

Start a bank. Then the government will print piles more money and shovel it at you. And if you just keep it instead of doing what they ask with it they'll... do it again and tell you in a really stern voice to do what they said you should last time.

Yes if the sellers are desperate for their money and will accept £300 for their holding, if we all received our shares on the same day, and if rumours of a price tank caused panic selling among the general populace. But that doesn't sound very likely. I, for one, would be far too apathetic to participate.


That doesn't make a lot of sense, it's simply a process of converting the fictional person referred to by economists as "the taxpayer" into millions of real individuals. The risk is to your £400 of equity, which you either receive for free, or have already paid for, depending on your point of view. So I see no transfer of risk as such, merely of equity.

I remember when they sold off British Gas. The shares were pretty popular, and it was the first time many people had owned shares. It's kind of fun to check the price every so often and say "Ooh look love, our shares have gone up". It's like scratch-cards for grown-ups.

Yes but you had to but those. They were not given for free. The problem was that most people did actually sell them over time. The holdings were too small for most and the additional paperwork simply did not justify their holdings.

Yes it's a transfer of equity, but it' also a transfer of responsibility for the success or failure of the bank and it presumably also lets the government knock a chunk off the national debt because the bank will no longer be a direct government asset.

Given the apathy of the general public for voting how much actual change do you think there will be in the running and governance of the bank? As a single majority shareholder the government has far more power and influence over the action and behaviour of the bank than the individual taxpayer will have if the transfer goes ahead.
I grant that if all of the taxpayers voted at the AGM in a coordinated fashion there would be little difference but exactly how likely do you think that is to happen? As you yourself have said, apathy is likely to be the big winner (just as it is at most elections in this country) so the running of the bank will revert back to the actual control of the largest (institutional) shareholders who, least we forget, ran thing sooo well beforehand.

Perhaps I'm being overly pessimistic but I struggle to see this as anything other than a scam to try and buy votes and return control of the asset back to the people who did such a bang up job of managing the financial system in the first place. And incidentally being able to blame us when it goes wrong for not making proper use of our shares to hold the bank to account.

It is not a great deal even if you do get more than £400. The fact that the Bank of England has allowed food inflation to run rampant means that we are losing more than this every year from rising food prices. Then for those with children it will a fraction of the cuts to child care. Most people will have suffered stagnant incomes and rising costs of living.

Then RBS is still not a great company to invest in. It has a massive hidden losses in Ireland for which it has not fully accounted for. Then should the euro crisis hit a new level of shock then RBS could once again become insolvent and need another bailout. In which case those £400 of shares will be worthless again and you sold your vote for nothing.

You don't shrink debts by giving away assets without taking money in exchange. Any borrowing involved in the purchase of the shares remains on governments books.

The running of the bank is handled by the board of directors. The role of shareholders is to approve the board. The government is also responsible for regulating the banks. Only in a fantasy world would you expect the interests of the regulator, the exchequer, and the remaining private shareholders not to come into conflict.

Those conflicts of interest cause temptation for politicians to interfere. They might do only benign things, like forcing an institution to behave irrationally for a bank but rationally for a political puppet show. Or they might lean on regulators to go easy on a major national asset, or they might develop special schemes and then strong arm the board into providing funds.

That is why it is not good for a government to own such an asset in the long term. They are already one of its largest customers, its regulator, and its lender of last resort to boot. That's enough control, being an activist shareholder with 80% equity would lead to bad things. So the only responsible option if the govt retains the shares is to resist the temptation to interfere, which is implausible in the longer term.