Tuesday, February 16, 2010

Banks must make good on commitment to increase lending

Data from the Institute of Directors shows that nearly 60% of businesses seeking bank finance in 2009/10 were rejected by their bank, and that 20% are financing their businesses to some extent with credit cards.

Liberal Democrat Shadow Chancellor, Vince Cable said:“There is a huge gap between what the banks tell us and the experience of companies on the ground.

“This evidence confirms that large numbers of small and medium sized businesses are still having difficulty in getting credit on reasonable terms. The nationalised and semi nationalised banks owe their existence to us, the taxpayer and they must make good on their commitments to increase lending at reasonable rates.

“Instead of paying themselves large bonuses, the money should instead be used to strengthen balance sheets and to provide commercial lending to sound and solvent British companies who have a vital role to play in our economic recovery.”

On today's news that Barclays kicked off the results season for UK banks by reporting a forecast-beating £11.64bn annual pre-tax profit, almost double the £6.08bn it reported for 2008, Vince renewed his call for the big banks to be broken up.
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