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Lend me some money

greedy-bankers>

The UK banks are certainly not responding to the governments supposed pressure and incentives towards extending lending. As ever they will blame the lack of applications that “meet the criteria” whilst the those applying will have a different take on things

A difficult one to call maybe but perhaps this quote neatly summarises

Capital Economics UK economist Martin Beck says: “There is still this issue of whether the demand for loans is still there. It is all very well to make it cheaper for households to borrow money but if they do not want to then the FLS is unlikely to have the impact the Bank is hoping for. We are in an economy where households are heavily indebted and looking to reduce this burden. Firms are equally reluctant to borrow because consumer demand is so weak.

The article this is taken from also includes a table of how each bank is lending ( see here) and my question would be why, if the above factors are consistent, there is such divergence across the lenders? The state owned banks are highlighted as the main culprits. 

As a broker for business finance I will have my own take on these matters but will accept that my sample of experiences is going to be pretty small compared with the total market of course. But I can certainly confirm that the market is interesting…

What is the solution? The great difficulty is that lending is determined by assessment of risk and given that there are so many criteria involved, it is impossible for an outside party to dictate who should lend to who and when. The power remains with the lenders 

 

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