The outgoing head of the UK Treasury told the Financial Times in an interview that Chancellor George Osborne will have to consider selling the taxpayer’s remaining 73% stake in Royal Bank of Scotland at a loss.

Sir Nick Macpherson said keeping RBS in the public sector “is bad for the bank and the economy.”

Macpherson told the FT it was “going to be tricky” for the UK state to sell all of its roughly £19 billion stake in RBS before the next election.

The outgoing Treasury permanent secretary told the newspaper that getting RBS back into the private sector would boost lending.

“That, I think, in the long term means growth for the British economy,” Macpherson told the newspaper..

“My one experience of running banks is that the longer they stay in the public sector, the greater the likelihood that you will lose value.”

Asked if there was a case for selling the rest of the UK state’s shares below the £5.02 “in price” paid by the British taxpayer in the RBS rescue of 2008, he said: “I think that is the judgment which will have to be made.”

The FT said Osborne authorised an initial sale of a 5.2% stake in RBS last year at £3.30 per share, arguing that selling an initial tranche of stock at a loss would help liquidity and demand for shares–  and force the price up.

However, the RBS share price stood at around 224p on Wednesday night, less than half the price paid eight years ago.