Thursday, 21 October 2010

Banks, Lending and Stupidity

From the Guardian:
Britain's banks lent more money to companies in August than was paid back to them for the first time in six months, the Bank of England reported today.
Unfortunate news for Ann Pettifor (see here).
Lord Oakeshott, the Liberal Democrat treasury spokesman, said: "Britain's banks have turned banking on its head – these days they borrow from British business, not the other way around. What's the point of pumping billions into the economy through quantitative easing when the banks just suck it out again?"
To keep the banks afloat, employing people and lending at least some money?
He added: "Small business lending is going from bad to worse. The annual rate of contraction is approaching 5%. The smaller your business, the harder you're hit."
Or the higher the risk you pose the harder it is to get credit. Shock.

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