Vince Cable intends to revive a plan to return RBS, which is currently 82% state owned, to the the private sector by distributing free shares to the public.
This news comes as John Hourican, head of RBS’s investment bank since 2008, has announced his resignation after taking responsibility for recent Libor scandals affecting the bank. Other banks, such as Barclays and UBS accused of colluding to rig Libor rates have already been fined.
RBS has announced a £400 million Libor settlement with regulators, including £90 million for the Financial Service Authority.
Cable wants the government to launch a give-away of RBS securities to allow voters to share in the benefits of the bank’s share price above a predefined floor. The government is expected to consider beginning reprivatisation next year.