Friday, November 23, 2007
Vince Cable challenges banks to find solutions (or else)
One possibility is allowing those in arrears because of circumstances beyond their control to move to shared ownership arrangements. Another is to move to active management – by the Bank of England – of bank reserves so that requirements are tightened in periods of boom and relaxed in recession. There is also the question of whether “light touch” regulation can survive when banks depend for their survival on “lender of last resort” privileges rather than the more brutal disciplines facing other companies.