A think tank will call on chancellor George Osborne to reprivatise Royal Bank of Scotland and Lloyds Banking Group through mass share sales to the general public.
The Financial Times reports The Policy Exchange will deliver the recommendation that a mass share sale would be the quickest and most effective way for the state to sell its shares in the banks.
A public sell-off would be similar to the “Tell Sid” sale of British Gas in the 1980s. Such a sale would give up to 45 million taxpayers a stake in the bailed-out banks.
The report has been written by former Deutsche Bank head of global equity strategy James Barty. He argues private shareholders would be more tolerant of a bank paying bonuses if they benefited from the profits it made.
The FT reports Osborne likes the idea of a public offering because the public would have a direct stake in the future recovery of the banks.