UK Should Use NatWest Windfall to Seed a Sovereign Wealth Fund
Proceeds from selling the UK’s remaining stake in the former Royal Bank of Scotland could boost the domestic market.
Time to cash out.
Photographer: Justin Tallis/AFP/Getty Images
Governments are good at frittering money away. The UK’s planned sale of its holding in lender NatWest Group Plc shouldn’t become the next example. This windfall could usefully stay invested in the domestic stock market — reallocated to a broader range of British companies.
From a narrow perspective, the potential sell-down is about recouping something from the 2008-2009 bailout of the then Royal Bank of Scotland. The UK spent nearly £50 billion ($63 billion) that it will never recoup shoring up the lender; hefty losses were the cost of preventing an even worse financial crisis. The question now is how best to use the proceeds from disposing of what remains of the holding, worth £7.8 billion at Friday’s close.