UK business secretary, Vince Cable, will admit that returning Royal Bank of Scotland (RBS) - which was rescued by taxpayers and the previous Labour government in 2008 - to the private sector via a sale looks increasingly unlikely. Instead, Cable will again promote the concept of distributing free shares in RBS to the general public, he said in a BBC Radio interview.
“The early hope of reprivatisation now looks a distant dream, unless at an unacceptable loss,” Cable will add in a press conference today. His speech has been released by his office in advance. “Recapitalisation may be the best solution, but it is currently impractical; full nationalisation would cost the taxpayer billions,” an extract reads.
According to Cable, the British public ““can benefit from the upside of eventual recovery in share prices, while professional managers run the bank with a long-term mandate which includes a commitment to assist national recovery through expanded small and medium-sized enterprise [SME] lending.” Corporations in the UK have been squeezed by a lack of bank lending.
Libor Fine on Way
The speech is expected to coincide with RBS’s admission that the bank attempted to manipulate the key London Interbank Offered Rate (Libor) and agreement to pay fines of up to £450m in a settlement with UK and US regulators.
According to one report, RBS will pay £90m to the UK’s Financial Services Authority (FSA), US$150m to the US Department of Justice (DoJ) and a further US$325m to the Commodity Futures Trading Commission (CFTC), although the figures are subject to possible late revision.