Tuesday, 14 October 2008

Two share prices for the taxpayer to watch

Following share prices on the stock market is not normally an activity to pre-occupy socialists. But following yesterday's announcement on the banks, for reasons Socialist Economic Bulletin has analysed, two share prices have become of great concern to taxpayers and need to be followed closely. The government has agreed to buy Royal Bank of Scotland (RBS) shares at 65.5p and HBOS shares at 113.6p. The government has thereby assumed huge risk for the taxpaper. If they are trading below those prices the taxpayer is making a loss due to the government's actions. If they are trading above them then, purely theoretically, this risk has not translated into actual loss - although whether the government could in fact dispose of any significant proportion of shares at whatever price they are trading at is another matter.
Just before 9am today HBOS was trading at 94.2p and RBS at 70.1p. SEB will be following this closely.

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