From today's CityAM: "[The Conservative Party's manifesto will include] details of plans to sell discounted shares in part-nationalised RBS and Lloyds when they are eventually re-privatised."
From today's Daily Telegraph: "Shares in Northern Rock will be handed to its customers under plans in Labour's manifesto to turn the troubled bank back into a building society."
Monday, 12 April 2010
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6 comments:
What's with this Building Society fetish I wonder? There's no evidence Building Societies have done any better than banks during the crunch. Many of them have in fact gone bust and had to be taken over by stronger rivals. And Building Societies are typically led by directors who are effectively completely unaccountable to anybody at all, since hardly any customers bother to vote in their AGMs.
What's your guess on the terms of the tory discounted share offer then?
adamcollyer,
There's been a couple of little ones in trouble, but actually, they've done a lot better. You had to get outside the top 10 to find problems. From what I can see, it was a bit of a mix of money market problems and commercial lending. They've barely fared worse than in the late 80s when Town and Country collapsed (which was because they failed to take out enough insurance for bad risks).
The reason is quite simple: building societies can only borrow 50% of their money from money markets under the BSA regulations. Without money markets, you can't go expanding very quickly (and as a result, you're less likely to take the sort of risks that Crock did).
Ironically, a lot of Nationwide's recent expansion was funded by money coming out of accounts at Crock and people putting it somewhere they felt was safer.
The big yawn goes on.
AC, as JT explains, part of the advantage of building societies is simply down to the fact that they have to fund themselves more with deposits, which makes them more cautious (exactly the same would apply to banks, of course).
It is also the case that the banks that did worst were former building societies-turned banks who let their new-found borrowing powers go to their heads (Northern Rock, Halifax), RBS is the exception.
S_L, I can't see a big difference between Tory and Labour ideas - it's the same gimmick just dressed up differently. As a taxpayer, I don't want cheap shares or bank bonus tax, I just want the banks to repay the £100 to £200 billion that the government lent them.
JH, indeed, hence the post title.
No. I want my shares. I've already paid for them. Now just give them to me. Not sodding Crock account holders. I paid for the bloody bailout and I want my shares.
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