I always considered Jack Straw with his small starched collar shirts to resemble a Dickensian character for some reason, I could imagine him parading around the workhouse delivering his orders to the poor and helpless people.
It appears that the economic secretary to the Treasury is made of even sterner stuff than Jack Straw however, after making this latest statement to a committee of MPs, Ian Pearson said;
“We will continue to want to hold the banks’ feet to the fire to make sure that they do the right thing by small businesses and by people who want mortgages for the future.”
The Banks responded by putting asbestos insoles in their shoes before facing up to the bully and suggesting that the criticism of them over lending to small businesses has been overdone. After all the banks had been ordered to preserve capital, reduce balance sheets and avoid risk and yet are still under pressure to lend money to small businesses.
Time to bring out the red hot poker?
1 comment so far
1 M Courcier // Dec 2, 2008 at 5:58 pm
The current situation is somewhat farcical. The Government are playing devils advocate here with the banking giants and have very much created a rod for their own backs. Although interest cuts may look appealing to the public at first glance, they are self-defeating.
What the banks need is a massive injection of capital and surely this will only come from attracting investment. Reducing interest rates to borrowers (who still cannot borrow) makes virtually no difference in the grand scheme of things, but does manage to starve the banks of any last chance of attracting investment cash!
Interest rate rises, whilst wholly unacceptable to borrowers, would surely tempt people onto the high street to part with their hard-earned cash. This would relieve the situation as delevering is desperately needed to get the funds flowing again. A hike in rates would also help to stem the tide of loan applications. It is totally impossible to “Borrow your way out of debt.”
Home-owners would need to be protected from rate rises in order to preserve their homes, but if the Government want to bail anyone out, it should be these people, possibly by way of shared ownership. It’s nice to own your own home, but not a God given right and for many people now, totally unattainable. If you think you own your home and it’s on a mortgage, just try missing a few payments to see who really owns it!
Tough times call for tough measures and whatever the Government do it will be unpopular with a percentage of the population. What they need to do is formulate a proper strategy to ease us out of the crisis without so much reliance on the global markets and being subjected to the vagaries of the same. We have the capability to be a lot more self-sufficient than we currently are and to become the great innovative, technology driven, world beating nation we once were.
Out of great difficulty comes great opportunity. If we grasp the nettle now and work together as a unified movement to rebuild our economy on sound financial principles that will allow sustainable and realistic growth based on wealth, not debt