THE Government seems to be surprised by banks’ reluctance to lend, despite its recent largess towards them. I am not.
We are in a recession. That means banks do not see a huge number of viable lending opportunities.
Of course, the Government has made billions available to banks, but this is in the form of a loan, plus the purchase of bank shares.
The share purchase has prevented banks going bankrupt, and that helps, but none of this increases the number of viable lending opportunities.
Rather than interfere in the day-to-day decisions of banks, the Government should boost the economy by the requisite amount, then banks will automatically lend.
Ralph Musgrave, Durham.
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