Bryan Mills
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Banks failing – again?

5/24/2011

1 Comment

 
OK so the bank bailout was essential but now it seems they are failing in their basic function – to provide liquidity.  After receiving billions in government funds the top five banks have only managed to lend £16.8bn to small/medium companies in the first three months of 2011.  (http://www.bbc.co.uk/news/business-13489884)  Whilst this dwarfs the total equity raised on exchanges in some countries (for example the ‘record’ £777m raised in Warsaw) this simply shows the size of the UK’ economy not the dynamism of British banking.  In perspective it is £2.2bn bellow what was targeted and required – can we expect to see this KPI failure reflected in lower bonuses – I doubt it.  But what is happening in banking?  We now have Moody’s threatening a downgrade if the government does not provide additional bailouts and a far from health economy (inflation, unemployment, growth) (http://www.guardian.co.uk/business/2011/may/24/uk-banks-face-ratings-downgrade-moodys)

1 Comment
JP Washington
6/5/2011 04:10:45 am

Not totally related but mentioned in your summary is housing and liquidity in terms of mortgage lending i assume?
What has been evident in the previous housing bubbles is the banks have increased interest rates( to kerb our spending or generate more income?). Now the BOE is in charge the rates have remained relatively unchanged, why is this? and will rates increase given that the unscrupilous past lending has contributed in many of us being led into a false sense of security as before. There is a profit in housing using your own funds but borrowing against property is now it seems a dodgy investment or is it?. The uncertainty of many like myself who acquired borrwoing when criteria was less restained now find the criteria exceeds their ability and any change in rates could leave more than a bad taste in the mouth, more no means or less than the required criteria so where does that put us(me).
I always felt like a little fish in a big sea now I feel like tired bird far away from land or any oasis!

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    Dr Bryan Mills

    "There he goes. One of God's own prototypes. Some kind of high powered mutant never even considered for mass production. Too weird to live, and too rare to die" Hunter S Thompson describing the author in 1971.

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