A burden for future governments

If you haven’t already, it’s well worth reading Robert Peston’s analysis of the first annual report from UKFI, the government’s banking wing.  There are plenty of fascinating titbits in there, but this passage on how long it will take the government to sell its shares in Lloyds and RBS rather jumped out at me:

“As the annual report makes clear, flogging perhaps £100bn of stock in Lloyds and RBS – which is what the holdings may easily be worth in a couple of year – can’t be done overnight.

That’s just too big a mouthful for investors to swallow quickly.

How can I be certain? Well in the entire history of Europe, there have only been three occasions when banks (or indeed any companies) have sold shares worth more than £10bn to commercial investors in a single exercise (they were the share sales by HSBC, RBS and UBS all carried out in 2008 and 2009).