Owen
The govement have 59% share in Northern Rock yet they still dont seem to have any influence. This seems to be happening in all bansk the govenment have a slice in – so why cant the government get the banks to start lending.
Chris.
Owen Replies : There is a fairly simple answer to this one, Chris… On the one hand, the Government want to get lending moving, but on the other hand, the Government regulator, the FSA, is telling banks to be prudent and to protect their balance sheets so that they do not get into further difficulty. The shareholders of the banks, whether Government shareholders or private shareholders, would expect exactly the same.
Prudence for a bank, in a recession, means being much more careful about who you lend to so there is a real dilemma in all of this. My view is that the Government loan guarantee schemes now being proposed are the only way to get things moving, but don’t expect it to happen overnight.
Ask Owen is about providing impartial financial advice for those concerned about managing their money. The country is suffering a serious economic decline and with people concerned about increasing costs of living and fuel bills, teamed with worries about job losses and house repossessions, it is a daunting time; so if you have a question to Owen fill in the comment box below and he will answer.
1 response so far ↓
Chris // January 22, 2009 at 10:52 am |
Owen, what was your take on the Baroness Vadera “Green shoots” controversy. Faux-pas or “politician in Gives-a-straight-answer shocker!”?
For me the media and The Conservatives seemed to got jump all over it far too readily…the last thing we need at a time like this is everyone behaving like a nuch of schoolkids.
Regardless of the word she used do you think there is light at the end of the tunnel for 2010?