The trouble when state and private interests collide
Lex sums up the difficulties when government ownership in banks is involved.
The trouble when state and private interests collide is that banks suffer crises of purpose. It is not enough to say both sets of shareholders want to maximise total returns. Even private investors disagree on the best deployment of capital. But a government’s holding has to be consistent with wider policy objectives. For example, the new US administration hopes to add 2.5m new jobs. Yet rolling heads at Citigroup, in which Uncle Sam could one day own an almost 10 per cent stake, are fast approaching 80,000.
