The Government, a bit short of ideas on how to stimulate the economy, has decided that small/medium sized businesses could really do with loans that are 1% cheaper than currently available! They are setting aside £20bn to guarantee banks who lend under this scheme. Well, if you try hard, you might see that it could have a slight benefit to the economy, I suppose - companies save a bit on interest payments, so they can invest the few quid in something useful .. maybe enough for a christmas party! I'm sure companies out there will be interested, but will all those that apply be making investments - or simply propping themselves up with more debt? How many small companies that really need the investment will probably miss out and go down the pan? There should be strict criteria on who gets it, but I bet there won't.
Hang on a minute! Haven't the government already pumped hundreds of billions of pounds into the banking system over the past few years with quantative easing? This was supposed to help banks lend to small/medium businesses - WHERE HAS ALL THE MONEY GONE? Don't suppose we will ever know! I know the Government are not actually giving £20bn to banks under this scheme (I HOPE!), but this effectively cheap money for banks, so they can lend without worrying about RISK! So basically QE didn't work, the banks weren't willing to be a bit risky and so didn't loan out as much as they could (not even meeting government set targets in some cases, which they should of by rights!) Banks (when they aren't cocking things up) make billions of pounds of profits each year, yet somehow need help lending to SME's - it makes me sick! This is why the country is failing - banks are sucking money from the economy/state and keeping it within their own circles. And when they don't make enough money, and fail, we throw even more money at them! Its a good game being a bank, HEADS THEY WIN TAILS WE LOSE! Nothing changes!
What annoys me futher is that they have £20bn spare to do banks a favour, but they haven't got £20bn to keep genuinely sick/disabled people on benefits! Just shows where their priorities lie!
I guess banks are feeling the pinch after the PPI scandal, so they need a state hand-out to make up for all that money they are paying back. See, the banks keep cocking-up and its US that suffer every time! Banks are in a WIN WIN situaton - they can't lose, they have no fear, and in the unlikely event things do fall apart the executives walk away with golden hand-shakes and vast pensions, never needing to work again (unlike the bank staff at the very bottom!).
As if all thats not bad enough, banks are now shedding jobs to bump-up their profits - and shareholder dividends! Thats what its all about folks. The Tories whinged about Labours failure to control the banking system, yet they are now feeding cheap money to banks and doing nothing about the bonus culture and extortionate executive pay. Well done Tories, is it cosy in bed with the bankers?
Dave trotted off to Europe and made this country look about as isolated and pathetic as it can get, by trying to protect the UK's profiteering banking system from regulation. He's scared of banks, thats the problem, and when they threaten to up-sticks and move abroad he bends-over backwards to keep them here. Yes, our banks contribute a huge amount to the economy and we would struggle without them - but thats the problem, successive governments has let our banking system become too vital, too corrupt, and now we depend upon them for survival. Things are pretty bad anyway, how worse can it get if a few banks moved abroad? And maybe its a price worth paying for having a more morally-sound banking system in this country! I won't hold my breath though!
http://www.bbc.co.uk/news/business-17437361
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