[jerry_atrick]

RBS is now a profitable asset, but what return does the government get out of it compared to what use they can put that cash to (which I would suggest would be debt retirement of expensive debt they may still have - that would give a better return).

The question also is how long before you deploy the cash for better taxpayer use. Looking at the share price here: https://uk.finance.yahoo.com/quote/RBS.L?p=RBS.L, and click on any time period up to 5 years, you will see it has been a long time and the share price has never been close to the £5-ish required to break even (the captial injection, not to mention other costs such as the the operation of UK Finance, etc).

Also, ring fencing is due to kick in soon, which will hamper the ability of the non-ring fenced bank (i.e. the investment bank), which seems to be on an upward path) to finance itself, cheaply, anyway. So even looking optimistically, the share price may grow over a period of time, but will it outstrip the (perceived) value of redeploying that government capital over that period of time? There are still art grants to distribute, welfare payments to be made, police to be paid, military, education, roads, etc. [edit] Remember, RBS has had its broken legs fixed and is standing on its own two feet again.. and this has always been the prerequisite for the government planning its exit strategy [/edit]

Don't forget, they are keeping a vast majority of their stake (and the outright shares).. There are (perceived?) political and business reasons why governments should not own banks (other than central ones - but even they have to be independent).

For me, it's weighing up all those things... In governments we trust, so I am sure they are doing the right thing

[Pete L]

I'm just thinking about a transition to a financially stable society where each cohort provides for it's future needs as well as one-off risks. The costs and risks of well managed state investment (viz Denmark or Norway) are perhaps lower than commercial operators. The counter argument is that the market will use the profits more efficiently - but the market deliberately ignores the demographic factors since few commercial operators have to worry about them.

There was a time when you could have reasonable expectations that HMG employed really bright people with a strong public service ethic. My recent experience of government departments is otherwise - combination of blind panic and short term contractors.

[jerry_atrick]

I have worked for 2 non-UK government agencies (ironically as a short term contractor) where a significant function they were tasked with was investment management;. One was unspent government taxes (treasury management) and one was for managing their long term obligations using their short term specific purpose charges (taxes?) for what they were responsible for providing.

These "fund" managers had a very narrow remit from memory - mainly cash, investment grade and sovereign bonds, some index based listed securitised derivatives and I think (but don't quote me), they were allowed a small proportion of their portfolio to be invested in the equivalent of FTSE-100 stocks. This is a very low risk strategy, yet both funds were on loss trajectories for years. We did a quick analysis on that country's investment funds/managers in low risk portfolios and found they would have made money if they invested it all in the worst funds at the time or used a fund manager, as well as not having the overhead of running an investment management team (which includes portfolio managers, operations, risk managers, etc).. The of the worst performers was pitiful - about 1% against what we benchmarked similar funds to be around 3.5% on average, bit it wasn't a loss.

If the government are willing, like a business, to invest, nurture and run and investment management function to the benefit of the people rather than empire building - good on them I say...