Taxpayers On The Hook For Bailout Banks Until 2017

Citi Blind

For bailed out financial companies now under partial or complete government ownership, don’t expect a change to their nationalized status any time soon.

Whether it be in the U.S., U.K., Japan, or anywhere else, a government’s divestiture process can take up seven years accoridng to Price Water House Cooper. That’s of course if they start putting the gears in motion today. If we delay, then it could take even longer.

Reuters: Any hopes of a swift government exit are misplaced, accountant PwC said, citing the experience of bailing out banks in countries such as Japan, Norway and Sweden and recent bank privatisations in eastern and central Europe.

“It could easily take two to three years to sell major stakes, but up to five to seven years before governments are able to fully divest of their stakes and related guarantees,” said Jon Sibson, a partner and UK government and public sector leader at PwC. Given the limited chance of a quick exit, the main focus of governments should be on influencing issues from “inside the tent,” PwC said.

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