The British government is seriously considering fully nationalising Royal Bank of Scotland (RBS) in an effort to kick start lending to businesses, according to the Financial Times.
The paper claims ministers are becoming "exasperated" that the bank, which is 83% owned by the taxpayer, is not lending enough to the British economy.
Apparently the government wants to force the company to lend more but is worried about opposition from other shareholders. The solution seems quite straight-forward: spend £5bn buying them out.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
George Osborne is said to be opposed to the plan, but with the British economy in a severe double dip recession, the pressure on the Chancellor to stimulate growth is intense.
As well, some commentators add that such a measure could actually hinder the correct functioning of the new Funding for Lending Scheme.
BS
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
