Some right-wing financial folk in Finland (That’s right, it was Mr. Wahlroos again!) have recently said that governments are a poor owner of companies, meaning, implicitly, that the private sector is a shining owner who knows best.
Readers will recall the article in FinnishNews (FN 13.1.23) about Citigroup Inc, one of the largest banks in the USA, that was reaching its lowest share price…
https://www.finnishnews.fi/business-finance/citigroup-inc-hits-bottom-of-barrel-again/
Now, 9 months later their share price has not seen too much progress – it has fallen from $43 to $40, a fall of some 6%! The new CEO is planning huge cuts, but there is nothing to convince your correspondent this privately owned bank is no shining example of private management.
Lets take another private bank, Deutsche Bank, Germany’s largest private bank. We also wrote about these folks in FinnishNews a few years ago in 2019 when the share price was €8.
https://www.finnishnews.fi/business-finance/should-we-fear-big-banks-yes/
As you can see, it has not been a great investment since then…, and also not another shing example of the private sector’s management skills…
Ten years ago, this bank purchased the publicly owned Postbank, and they still have not been able to integrate it properly. The German banking supervision have reacted strongly to complaints from thousands of Postbank’s customers who have not been able top access their savings for months…
This is a bank that has been on the brink for years and nothing appears to have improved even though new CEO’s come and go with millions of euros in salaries, along with their highly paid investment bankers… One must really wonder what really happens in their marble lined offices!
Here is Nokia’s share price history – once the largest company in Finland with thousands of patents protecting their innovations:
There is plenty food for thought here but please do not believe people when they say that the private sector has a monopoly on efficiency or innovation!
The private sector benefits from fair and open cooperation with the public sector – the one cannot exists profitably without the other.
