It was very nice of Hamad bin Jassim bin Jabr al Thani to express an interest in buying a few shares in Royal Bank of Scotland and Lloyds Banking Group, but the prime minister of Qatar ought to know that a few hurdles have to be cleared before the great UK banking sell-off can begin.
For one, Sir John Vickers' independent banking commission has to report its recommendations on competition and structural reform, which won't happen until September. The government then has to decide whether to adopt, adapt or ignore the findings. That process could involve much argy-bargy – not least between chancellor George Osborne and business secretary Vince Cable.
Both banks would be different investment propositions if ordered to undergo major structural reform. So it would be a complete no-no for the government, whose senior members have the best idea of their post-Vickers intentions, to attempt to sell down the state's stake before matters are decided.
In fact, it's odd that the government itself doesn't make that point loudly. Instead, it seems happy to indulge the banks' own musings on the timing of a sell-off. Ministers should put the horse firmly before the cart: decide what kind of banking system they want before trying to sell shares in it.
No comments:
Post a Comment