Giving away the banks is fraught with danger
March 8th, 2011 Posted in Uncategorized by Tom Papworth
Over at the Adam Smith Institute, Dr. Eamonn Butler criticises Stephen Williams’ proposals to give away the Government’s shares in RBS and Lloyds to each and every person in the country. As Eammon notes, this form of privatisation proved disastrous in post-communist Russia, where citizens sold their shares too cheaply to oligarchs with deep pockets. Even if they hang onto the shares, Eammon doubts that they would become the interested shareholders that would ensure good governance of the company, as is surely desired.
I agree with him, but I also see two further problems with this proposal.
Giving away shares in RBS to 60 million people made holding the AGM a challenge