Peter Bacon’s final argument against nationalisation in his Morning Ireland interview was the following:
Also, if you nationalise the bank, it’s gone. If the bank remains there, even if it comes to pass that in some cases there is majority ownership by the government, by the taxpayer, there will be a quotation on the Irish and London stock exchanges. There will be a price every day that bank shares will trade at and that will provide taxpayers with an exit mechanism out of their ownership of the banks in due course.
Personally, I can’t see any merit in this argument.
A nationalised bank isn’t “gone”—the banks will still be there, customers won’t notice a difference and even the famous “sign on the door” won’t change. And taking the bank off the stock market doesn’t in any way leave the state without an exit mechanism. Companies come on, and are taken off, the stock market all the time.
The Irish government already has experience of floating large state companies on the stock market in IPOs (Eircom, Aer Lingus) and our fiscal problems may well require them to repeat this process with a number of other state businesses. So, as an argument against nationalisation, this just seems to be clutching a straws.
A related argument (quoted in today’s Sunday Times) from the Minister for Finance is that it is best to keep the banks quoted on the stock market because this will keep them “under market surveillance”. There may be something to this argument but I wouldn’t push it too far. These would be the same markets that did such a great surveillance job before.
A final argument in this vein came from Brendan Keenan on this morning’s Marian Finucane radio show. Keenan argued that it was important to keep the banks listed on the stock market because if we took them off, the only way we could get the banks back into private ownership would be to sell them fully to foreigners.
Quite apart from the silly xenophobia (could these dreadful foreigners possibly be worse at running our major banks than the Celtic heroes who have run them into ground?) the fact that the banks could be IPO’d on the stock market means that this argument is substantively wrong.