Lessons in how to sell off banking shares

As UK Financial Investments ponders when and how to sell our shares in Lloyds and Royal Bank of Scotland, it can look to the US to see how they do these things over there. The US Treasury department today said it plans to dispose of its 7.7bn shares in Citigroup, a 27% holding, by the end of this year. The statement from Washington was thin on detail – it said the shares would be sold in the market "through various means in an orderly and measured fashion" according to a "pre-arranged written trading plan." But, even within such a broad description, there are two points worth noting from a UK perspective. First, a trading plan – a "dribble-out" strategy, as they're calling it in the US – may be necessary for the government to avoid accusations of massaging the market. Governments are the ultimate insiders in the banking industry – they can change competition rules, appoint lending czars, and so on – so it's crucial to put as much distance as possible between politicians and the sale programme. Second, the US authorities plan to sell into the market. That, too, is sensible since the aim is to achieve fair value for all taxpayers. If the US Treasury's analysis is correct – and if the programme works – the Tories should take the hint and drop their half-baked plan to launch a "tell Sid" campaign to flog shares in Lloyds and RBS at a discount to the public. "Keep it simple," seems to be the US approach – it sounds much better.