RBS Sell Off.

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RBS Sell Off.

Seven years after the government stepped in to buy shares in RBS, shares have begun to be sold off, thereby returning the bank to private investors.

RBS shares are trading 33 per cent lower than the amount the Labour government paid for them, as a result, selling them has created a loss of £1 billion for the government in the first selling of 600m shares.

The move to sell shares at this moment has attracted criticism from the opposition and economic commentators. Labour has criticised the moves timing when restructuring is still occurring and the loss in value of shares, saying that the £1 billion which could have been recuperated could have been used in public services.

The Chancellor may have started to sell off these shares to ‘draw the line’ between RBS’ public ownership and restructuring from after the crash to private ownership, thereby letting it perform to market values. It was also thought that shares were unlikely to regain their original price of seven years ago, regardless.

Government intervention was deemed necessary fearing the collapse of RBS had the possibility to have dire knock on effects on the financial system. £45 billion of shares were bought, amounting to 79 per cent of the bank being publicly owned.

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