Friday, Nov 21, 2008
Darling The Bank Enforcer
mail Online: Darling threatens to FORCE banks to lend to firms and families
Alistair Darling is so exasperated by the 'moral failure' of banks to help small firms and families that he is poised to toughen the law.
The Chancellor is studying legal options to end the 'unacceptable' behaviour of the banks towards companies struggling in the downturn.
The Government argues that when the taxpayer-funded recapitalisation scheme was agreed, the banks entered into an undertaking to restore lending to 2007 levels.
But Mr Darling also has a range of legal options open to him, including the creation of a 'bank enforcer' to supervise their lending behaviour, or the imposition of a cap on the interest charged for business loans.
Posted by sold out @ 01:07 AM (977 views) Add Comment
22 Comments
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1. drewster said...
What if people no longer want to borrow? With falling house prices, repossessions, and massive job losses, will anybody want to borrow money? The chancellor can force banks to lend but he can't force the public to borrow....
2. sold out said...
Be Afraid, be very afraid. The Bank enforcer is coming to your street, to your town.Armed with a new and more lethal form of his secret weapon "Easy Credit".His mission to re-inflate the housing bubble before 2010 and Gordon can finally go to the polls.
ZANu labour are the most dangerous government this country has ever witnessed.
It appears they will do absolutely anything in the short term to ensure they cling on to power.
Will it work?
I don't think so.How ever much you hold a gun to the head of the banks and scream" lend lend lend", you still need the punters to borrow the money and in 2009/2010, when you have record unemployment, repossesions and business closures and Record falls in house prices, it aint gonna happen.
3. planning4acrash said...
That idiot can give us a tax cut instead, coz we'll subsidize lending counter to market forces.
4. planning4acrash said...
Soviet planning, Comrades lending in accordance with political priorities, to achieve the British Socialist Party's 5-year plan. Oh dear, or dear, oh dear.
5. matt_the_hat said...
The chancellor can force banks to lend but he can't force the public to borrow....
Yes he can and details will be released in the pre-budget announcement - its call public sector debt and you will pay for it.
6. landofconfusion said...
Maybe it's time to buy gold now...
7. growler said...
The mans a blithering fool. The banks have got to repair themselves from the poor state they're in. I hope the HPC's see the deliberate double entendre here!
8. life's short said...
And of course the government are leading the way.... with Northern Rock running down it's loan book.
9. guiriduro said...
While I wholeheartedly agree that we need a credit contraction, it has probably gone too far - at least for companies cashflow requirements. Its probably a good thing for consumers to face further contraction, but the debt spigot should open a little once house price drops exceed 40%, although they are some way from that.
And as a taxpayer though, seeing Darling waste large sums of borrowed money that taxpayers will have to pay back, on supporting failed banking institutions who refuse to lend, is doubly galling. The ZaNuLabour fools are wasting our money - nobody said that those loss-making banks had to be the ones to lend. If Britain had a careful bank wind-up scheme, there would be no worried public, who would always know their deposits were safe and liquid even in the case of winding-up. The govt could create new banks that would receive depositors, could buy branches at rock bottom from broken banks, and could lend sensibly without the encumbrance of previous foolish lending. The only losers would be the investment community holding the resold debts of the failed banks. Ah - now we see the real reason for this grand taxpayer theft!
10. techieman said...
NR is the business model. You first strengthen the balance sheet by giving peeps a 5 year fixed bond @ 7% guaranteed by the government.(the carrot) then you repossess those in arrears for 10 mins or more (well yes an exageration but not as much of an exageration as Darling stating that banks should repossess as a last resort) - the stick.
Then when the Carrot is dangled long enough and you have enough inflows to get rid of the dependence on non retail funding you remove the carrot. BUT you make the stick bigger and weild it faster and harder.
11. techieman said...
"While I wholeheartedly agree that we need a credit contraction, it has probably gone too far - at least for companies cashflow requirements. Its probably a good thing for consumers to face further contraction, but the debt spigot should open a little once house price drops exceed 40%, although they are some way from that."
I am afraid that this is the nature of the beast. Much as on the way up one loan begets another the same is happening in reverse either by forced liquidation (default) or what will be volantary liquidation (people refusing to take out debt and/or repaying it and/or saving it). The economy runs on greed and fear we have had the confidence leading to over confidence leading to exuberance leading to greed (although not everyone has benefited due to social divisions in this country). now we will have the opposite leading to fear. We are still a long long wear from fear and final capitulation, and there may be "green shoots" along the way, but quite quickly they will be destroyed by an overnight frost.
12. sold out said...
Once the "bank enforcer" fails, i guess Zanu Labour will launch the "morgage enforcer" to help families in Britain get on the housing ladder and own their own home, (pushing more negative equity on the masses)
This is just too funny, watching Nu labour reveal themselves to be so grossly inept and useless that they really are just like a "70's student union".
13. down wave said...
I am sorry to say this,but Darling is a puppet of Gordon Brown. Gordon Brown is displaying publically symptoms of desparation, irrationality and hypertension. Personally, I feel that for the sake of the UK he should see his doctor and sign up for Incapacity Benefit.
Does any other reader here, have a medical diagnostic opinion of his comportment?
14. Bertywooster said...
Everything they say and do is aimed at an election in early 2009. The economy can only get worse, so an early vote is their strategy before their rumbled.
Love him or loathe him, mandy pandy is a class act. He is responsible for getting brown the clown to put his trousers on the right way round. He's spiked osborne's water pistol and the BBC are singing from the same hymn sheet. Anyone noticed the lack of critical analysis by the BBC of the government's economic policy? Yes indeed, a class act.
15. rm96696 said...
Since the main objective of government policy is to prop up the housing bubble, why doesn't he also force people to purchase houses at inflated prices? That should do the trick.
16. jack c said...
Picking up on techieman's point - "Then when the Carrot is dangled long enough and you have enough inflows to get rid of the dependence on non retail funding you remove the carrot. BUT you make the stick bigger and weild it faster and harder"
The Council of Mortgage Lenders (CML) has urged lenders not to consider taking advantage of a 1925 law that allows them to repossess properties after just two missed mortgage payments, arguing that they will almost certainly fall foul of the FSA. In a landmark ruling at the High Court last week involving an original mortgage by GMAC-RFC, Justice Briggs reaffirmed that the Law of Property Act (1925) gives the right of lenders to take possession without the explicit permission of a judge. While the case involved possession of a buy-to-let property, fears have been raised that it may be applied to owner-occupied properties, with Briggs himself admitting that the ruling had "wide-ranging implications".
Full story www.mortgagesolutions-online.com/public/showPage.html?page=826556
17. matt_the_hat said...
14. rm96696 - why doesn't he also force people to purchase houses at inflated prices? That should do the trick.
That's exactly what is happening - the government call is re-capitalization of the banks
18. it_is_going_with_a_bang said...
Is it not widely agreed that lending had got out of hand which in turn has put millions into debt and caused banks to go bust???
Yet he wishes the banks to return that level of lending - or should i say irresponsible behaviour?
Whilst I have some sympathy with the views on passing on interest rate cuts, the decision of a bank as to whether or not to lend to someone is ultimately their decision.
Sounds to me like they are looking for someone to blame more than anything else.
19. mark said...
the banks don't yet have enough money to start lending again, they need more time to rebuild themselves.... to be honest we should never have allowed GB to bail them out, is there anyway we can get a vote of no confidence on GB and AD?
20. Letsgetreadytotumble said...
This is going according to plan. Labour have wrecked the economy on purpose, and then nationalise the banks.
With the eventual huge profits they can fund more people onto Welfare and increase the Labour vote. Thus distorting democracy and guaranteeing their place in government. Once this is achieved, I'm not sure what the next part of the agenda is, but this is just the foundation building for more to come.
21. iguana said...
Jackc
Another health warning,
before entering panic mode over to LOP Act 1925, try reading it first, it also contains wide ranging safeguards for occupiers.
22. voiceofreason said...
LETS....
Yup, socioeconomic gerrymandering...