Friday, 15 June 2012

A vicious circle

Last night [Thursday 14-Jun-2012] at the Mansion house dinner both the Chancellor & the Governor of the Bank of England have announced more money for banks. It has a different title but in reality it's still just money for banks.

What they hope is it will make it easier for banks to lend.

The problem here is the banks see two types of lenders [bear with me here I'm making it a little simplistic] good credit worthy ones and bad credit worthy ones.

The good credit worthy ones don't want to borrow at the moment because of the international economy and a severe lack of confidence.

The bad credit worthy ones want to borrow [always] but the banks are reluctant to lend to them, which makes sense to me.

So how do we give confidence to good credit worthy clients to allow them to borrow?

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