Today we are back to playing the absurd media/government/Lib Dem game of threatening nationalisation if a bank share price goes down too far, only to see the share price go down because investors fear nationalisation.
Why can’t they all understand that a falling bank share price is no crisis unless they make it one. If the bank does not want to raise new share capital from the market any time soon, it can live with a low share price. If a bank has something to prove because it has just lost a lot of money it might have to live with a low share price until it can publish some figures showing it is back making profits. So what?
It doesn’t help to have instant pundits opining that if the price falls too far the company needs to be nationalised, and it does not help to have Ministers refusing to rule out nationalisation. Where are they planning to get all the money from to nationalise another bank? And why do they think a falling share price matters? If the bank has cash and capital, as they tell us the main regulated banks have, there is no problem. Leave the private sector ones alone.