Bank on bankers (The Sun)

CPS Director Tim Knox wrote for The Sun’s Business section on Saturday.

“ROYAL BANK OF SCOTLAND was slammed this week when boss Stephen Hester said investors would be “dumb” to spend money on UK banks. Here, Centre for Policy Studies chief TIM KNOX argues we should be backing, not bashing, RBS.

EVERY family in Britain is now a fund manager. When the State bailed out RBS three years ago, we paid the equivalent of £1,750 per household to do so.

At that time, the Government had no choice. If RBS had been left to sink then, the whole UK banking system would have collapsed. All the ATMs would have closed. The supermarket tills would have shut down. Chaos and destruction would follow in hours.

So, whether we like it or not, we are now all fund managers. And the priority, the only priority, of the fund manager must be to get the best possible return on his original investment. At the moment, we are not doing very well. Wouldn’t it be better for all of us if RBS was once again a sound and profitable bank? For it is only then that our shares in RBS can be sold without a loss.

Or even better, the shares could be given away to all of us who provided the bail-out. Then we would each be able to participate in the profit on the investment.

In place of mutual suspicion and mistrust, we would have a common bond of interest. Instead of despising bankers’ greed, we should respect their ability to make us prosper. We should wish them well.”

Date Added: Monday 28th November 2011