Adding the debt of the mainly nationalised banks to the National Debt raises it by £1.5 trillion

This article mentions that the ONS is adding the debt of RBS and Lloyds/HBOS to the National Debt as it considers them de facto nationalised companies. This raises the National Debt by £1.5 trn (£1,500,000,000,000).

This, however, is a slightly misleading way of looking at things. The debts of the banks are being counted as government debt - but the assets of the bank are not being counted as national assets. This does seem rather odd - and does show how accounting conventions can be a bit strange.

It also strikes me that - now the debt of these banks is considered nationalised debt - the government should go the whole hog and nationalise them. There is no benefit for the state in having small minority shareholders in these firms if they are not willing to bear the losses the banks are incurring and are insisting the taxpayer pick up the tab.

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