Back to the Future

Government, Financial Institutions and the Global Financial Crisis

Forced to bail out an industry too strategically important to fail systemically, government is firmly inside the financial services tent where it is set to remain for a considerable time.

The complexity of individual financial institutions’ situations, difficult market conditions and an unattractive disposal environment combine to make the possibility of early government exit from their stakes in the private sector highly unlikely. It will take two to three years to sell major holdings, but five to seven years or more before governments are able to fully divest of their stakes and related guarantees.