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Lack of bank lending is heartbreaking, says King
Business Digest: Mervyn King lets rip after stats show bank lending is down for third successive month
The harsh treatment of corporate clients by leading British banks has led to a "heartbreaking" situation in the small-to-medium business sector, the Governor of the Bank of England, Mervyn King, told Parliament yesterday.
In language that was seen as unusually emotional for the Governor, he accused banks of riding roughshod over longstanding business relationships, sending out computer-generated letters demanding higher payments, even of their most loyal customers.
The claim by the banks that corporate lending was down because of a lack of demand from business was "not an adequate response", King told the Treasury Select Committee.
According to Bank of England figures, loans to business dropped by £2.3bn in May, the third straight month in which lending fell.
Read a full report at the Times ·
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Never let it be forgotten that it was the Democrat Congress in the US which put the arm on banks to lend to people who had no hope of making repayments which precipitated the 2007 & ongoing meltdown.
Would YOU, voluntarily, lend money to someone you KNEW was incapable of paying it back?
The lack of demand is easy to explain. No one wants to try any more. They are taking the attitude that they will either be refused or it will be cost prohibitive. The banks may need to watch out, as people and companies will stop trying to borrow and either just not do things or do things using their own money. The banks will deserve all they get. I wouldn't recommend mine to my worst enemy.