Banks: Industry and Governments are telling them...

[Power Lunch Club]

It's is becoming clearer by the day that banks are not passing on interest rates cuts or even actually doing any lending as they ought to be.

Today, Gordon Brown has called upon banks to take action and of course many organisations such as FSB, BCC and industry "captains" are all pleading with banks to start lending as it's precisely what the economy is needing.

Yet here these massive institutions are holding back....are they mad? Why are they doing this, what's the rational?

Is it time for a new bank to come on stream (how that would happen is beyond me) and break this the mould of what is happening?

Again, and I said this in another thread, are the banks just looking after their own balances sheets and should they be allowed to do that, when it's supposed to be us, the taxpayers/goverment who has guaranteed these organisations security. If it falls over completely because of their behaviour, we run the risk of losing over and over again. Does goverments now have to "slap" the banks down and tell this, this is what you will do from here on in?

Here is the full story about GB urging banks to get on with it.

BBC NEWS | Business | Government urges lenders to act

 

[Brian McIntosh]

It's interesting that all the major banks have removed tracker mortgages from their portfolios. I was one of the lucky ones this year when I remortgaged my house. Paying off the mortgage was top of my list and a tracker was the best way to do this. Now you can't get one for love nor money. At the end of the day, the banks will always look after their own interests and sod the man in the street.

 

[Gordon N]

Is it time for a new bank to come on stream (how that would happen is beyond me) and break this the mould of what is happening?

If only I knew how to do that! :laugh:

Regards,

Gordon

 

[Scottish Business Owner]

I'm not a fan of banks but as I understand it the main issue here is that LIBOR (the rate that banks lend to each other) is much higher than the current base rate which I guess makes the banks nervous to pass on the cut. The government has committed to putting in place guarantees that should allow LIBOR to fall but from what I can gather these mechanisms are not fully in place.

Earlier today some more of the major lenders have agreed to pass on this cut in full and I think that's only fair given it was the taxpayer who actually bailed them out. Banks will always do what's best for them I agree but all i'm saying is there are other factors here and I dont think the media is doing them any favours.

 

[Power Lunch Club]

Now the EU is getting in on the issue of telling banks they must lend.

BBC NEWS | Business | EU wants banks to boost lending

I have said it before and I will say it again....(yes I am up on my hobby horse). There has been no more money printed by governments around the world. The present money markets are just like stagnent pools of water. i.e. not moving. When the money is flowing through the system the economy will recover. But it's the fear issue again. Until we all develop balls of steels and the banks too....nothing absolutley nothing (or any of Darling's plans) will cause anything to change. It's the fear that must be rid once and for all.

"...We have nothing to fear but fear itself..."