I don’t know the answer to the question I've just posed, but I think the recent news about RBS raises some interesting issues about the perceived zombie problem in the UK economy.

Firstly, what is RBS accused of? The claim (here with a video on the BBC, and here in The Guardian) is that the grossly mismanaged bank – 80% owned by you, the taxpayer - forced firms to close so it could make a profit by grabbing the assets of the ‘failed’ businesses. This is a serious allegation that is now in the hand of lawyers, and possibly the police.

Serious criminality is a huge problem in the financial services industry, with JP Morgan Chase’s record $13bn (£8bn) settlement with US authorities for misleading investors during the housing crisis just the latest in a damningly long list.

I don’t want to address these legal issues here. Instead, I want to play Devil’s Advocate and argue that RBS may be doing the economy a favour, if its actions are leading to acceleration in the rate of bankruptcy amongst zombie companies. These are the 108,000 heavily indebted firms, which generate only enough revenue to pay down interest at historically low rates, which should either be allowed to go to the wall or be restructured, according to the Adam Smith Institute (reported in the Guardian). Its report says such zombie firms raise the costs of entry for more innovative companies. Banks that continue lending to such firms only undermine competitiveness by preventing workers and money finding their way to the companies of the future.

I don't seek to endorse any possible criminal actions by RBS, or seem heartless in suggesting that a higher rate of bankruptcy is desirable - but there is a discussion to be had on this topic!

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