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rich1231
16,623 posts
129 months
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Eric Mc said: The problem is that the (say) 10% of bad people doing bad things in banks have a massive impact on all of us.
90% of small businesses are now suffering because of the behaviour of the small number (as you claim) of bad bankers. Are they really? Are 90% of small businesses asking and refuse lending? So much hyperbole.
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Eric Mc
67,261 posts
134 months
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rich1231 said: Eric Mc said: The problem is that the (say) 10% of bad people doing bad things in banks have a massive impact on all of us.
90% of small businesses are now suffering because of the behaviour of the small number (as you claim) of bad bankers. Are they really? Are 90% of small businesses asking and refuse lending? So much hyperbole. It seems to be backed up by the facts. There are constant reports in the media of how hard it is for small businesses to get funding and I also know this from what my own clients are experiencing. The fact that the government has seen fit to introduce yet another scheme to "bribe" banks into lending to business also indicates to me that, at the moment, the banks want to sit on their funds rather than "invest" them to encourage industry and growth. If you think the extent of lending to business is all fine and dandy, that is not the picture I am getting.
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Guam
15,466 posts
137 months
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Eric Mc said: It seems to be backed up by the facts. There are constant reports in the media of how hard it is for small businesses to get funding and I also know this from what my own clients are experiencing.
The fact that the government has seen fit to introduce yet another scheme to "bribe" banks into lending to business also indicates to me that, at the moment, the banks want to sit on their funds rather than "invest" them to encourage industry and growth.
If you think the extent of lending to business is all fine and dandy, that is not the picture I am getting. Here I will agree with Eric, there are issues out there for many SME's. The main one being the banks risk aversion regime and the desire to want the family home as security even where adequate security is available within the business. Its the primary reason the government backed schemes have been failing imho.
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RYH64E
3,112 posts
113 months
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Guam said: Here I will agree with Eric, there are issues out there for many SME's. The main one being the banks risk aversion regime and the desire to want the family home as security even where adequate security is available within the business.
Its the primary reason the government backed schemes have been failing imho. Barclays offered to lend us a maximum of £25k at an interest rate of 6 or 7%, £25k was 1/4 of the amount I wanted and 1/6 of the balance of our current account (for which they charge account fees and pay 0% interest). And they wanted a charge on our commercial property.
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Steffan
Original Poster
6,201 posts
97 months
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RYH64E said: Guam said: Here I will agree with Eric, there are issues out there for many SME's. The main one being the banks risk aversion regime and the desire to want the family home as security even where adequate security is available within the business.
Its the primary reason the government backed schemes have been failing imho. Barclays offered to lend us a maximum of £25k at an interest rate of 6 or 7%, £25k was 1/4 of the amount I wanted and 1/6 of the balance of our current account (for which they charge account fees and pay 0% interest). And they wanted a charge on our commercial property. I think that really says it all about the reality of bankers being keen to lend to small businesses. They are not, they never have been and I do not expect the latest faint hope from George Osbourne to make any difference. The bankers have totally refused in this respect since the election two years ago. Why would they change now? If the government want to direct the lending of banks they need to man up and change the rules of the game. Otherwise the banks will ignore the pleas from politicians. The situation requires management not empty promises and pleas.
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Murph7355
9,416 posts
125 months
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Eric Mc said: Lots of unkowns - which we may only find out for sure when the tanks are in the streets. Indeed there are. And everyone commentating and hypothesising without any view of unbiased facts is hardly going to help keep the tanks in their pens  We are too led by a populist media, a feckless leading class and a desire to point the finger at a pantomime villain rather than ourselves. I still maintain that there's sleight of hand going on here, and most of this is a distracting technique by a desperate media and politicians. Later you posted that 90% of small businesses are suffering. Are they? Is there evidence to back that up? And if there is, what are they suffering with? If it's not being able to get cheap loans, for example, consider that the government insisted the banks increase their capital reserves (probably never a bad thing, but it's counter to lending more cash out. And it's debatable how necessary this was). Then consider that the government changed it's mind and is now trying to coerce lending - who to? Has the credit profile of the customers changed? If it has, how and why and wouldn't that indicate recession is easing? If not, why lend more to them only to get castigated when it goes tits up again? I've not yet seen any material downsides to the typical small business/individual of the Libor debacle. NB I am most definitely not excusing wrong doing here, but what were the effects? And while we're at it, who was really to blame? As for the other bits and bobs dragged up from the annuls of history, I'm not sure what the wide ranging impacts of those were either??
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sidicks
3,244 posts
90 months
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Steffan said: I think that really says it all about the reality of bankers being keen to lend to small businesses. They are not, they never have been and I do not expect the latest faint hope from George Osbourne to make any difference. The bankers have totally refused in this respect since the election two years ago. Why would they change now? If this lending would be profitable, why would they NOT lend to SMEs??? 
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Steffan
Original Poster
6,201 posts
97 months
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sidicks said: Steffan said: I think that really says it all about the reality of bankers being keen to lend to small businesses. They are not, they never have been and I do not expect the latest faint hope from George Osbourne to make any difference. The bankers have totally refused in this respect since the election two years ago. Why would they change now? If this lending would be profitable, why would they NOT lend to SMEs??? You have a far greater proximity to bankers than me. Why indeed?
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sidicks
3,244 posts
90 months
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Steffan said: You have a far greater proximity to bankers than me. Why indeed? Maybe the perceived risk is much higher amd SMEs aren't prepared to pay the interest rates...
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1point7bar
1,091 posts
17 months
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sidicks said: If this lending would be profitable, why would they NOT lend to SMEs??? Because the current scenario feels more comfortable with cash on their balance sheet.
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Ozzie Osmond
12,130 posts
115 months
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rich1231 said: Are they really? Are 90% of small businesses asking and refuse lending?
So much hyperbole. It seems you're overlooking the mickey-mouse interest rates being offered, which for practical purposes make the money inaccessible.
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Steffan
Original Poster
6,201 posts
97 months
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sidicks said: Steffan said: You have a far greater proximity to bankers than me. Why indeed? Maybe the perceived risk is much higher amd SMEs aren't prepared to pay the interest rates... In all probability. The banks will avoid the bureaucracy. Understandably. Many years ago I was instrumental in setting up two separate inner city businesses employing almost exclusively female labour and I was also successful in achieving two EU grants to establish the businesses. Ticked all the boxes politically and the businesses did work successfully and still do. I vowed never to do this again because of the amount of bureaucracy and information demanded by the LA, Dti and administration of the grants. And I never have. I could have earned far more money for the projects driving taxis and giving the proceeds to the businesses than I did getting the grants, because of the level of work involved. Never again! I think the banks will avoid these loans successfully. Banks have never wanted this business.
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Guam
15,466 posts
137 months
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sidicks said: If this lending would be profitable, why would they NOT lend to SMEs??? Its not they wont lend its the terms they are trying to lend under thats the issue. Take the first lending scheme they tried, The Govt would put up 75% of the dosh the Banks were to put up 25%. They were doing this with cash the government got them. The Govt required no security on their chunk. I had HSBC come in to tell me about the scheme. So <wasnt interested but thought I would probe further out of academic interest> it turned out despite having over a mill of saleable assets on the books <verified> and no charge on them. They still wanted my house for their 25%  I asked them <6 months into the program> what the takeup had been Almost nil came the response. Perhaps The taxpayer injection of funds should have had a directors guarantee attached from the Banks boards. Make them comply with the strictures they impose on SME's
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Murph7355
9,416 posts
125 months
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Banks aren't as prudent as perhaps they ought to be with respect to who they lend to. Result = widespread moaning and bashing. Banks are as prudent as perhaps they ought to be with respect to who they lend to. Result = widespread moaning and bashing. It's a funny old world  And comforting to see the Daily Mail and myriad internet commentators are expert enough that we needn't worry about any damage to our finance sector as there are plenty of people who'll step up to the plate (starting with Dave I guess).
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johnfm
9,024 posts
119 months
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Eric Mc said: rich1231 said: Eric Mc said: The problem is that the (say) 10% of bad people doing bad things in banks have a massive impact on all of us.
90% of small businesses are now suffering because of the behaviour of the small number (as you claim) of bad bankers. Are they really? Are 90% of small businesses asking and refuse lending? So much hyperbole. It seems to be backed up by the facts. There are constant reports in the media of how hard it is for small businesses to get funding and I also know this from what my own clients are experiencing. The fact that the government has seen fit to introduce yet another scheme to "bribe" banks into lending to business also indicates to me that, at the moment, the banks want to sit on their funds rather than "invest" them to encourage industry and growth. If you think the extent of lending to business is all fine and dandy, that is not the picture I am getting. Eric You want banks to lend more AND you want more regulation. BUT part of this 'more regulation' wants bansk to hold more capital reserves - which means , as you say 'banks sit on their funds'. So - it seems you want more lending, but also more regulation - which are at odds. Banks want to make profit. If lending to SMEs is profitable, they will do it. If they don't see it as profitable, they won't.
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Wurls
1,260 posts
74 months
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Steffan said: Have you actually read the details? Are you aware of the facts?
The latest resignations were made this week. The investigation is ongoing and includes criminality and insider trading. Right at the top of the Bank.
You are correct that the systemic dishonesty in Nomura stretches back over 20 years. But the latest resignations and furore are most certainly current. Nomura is a securities company which is a very different thing in Japanese financial regulation. It is not a bank.
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Murph7355
9,416 posts
125 months
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Wurls said: Nomura is a securities company which is a very different thing in Japanese financial regulation. It is not a bank. Quit confusing the rant with factual information. This thread did not get to 75 pages by having sound, independent info and a calm head sifting through info. Do you KNOW how many kittens will die if it doesn't get to 80 pages?
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Eric Mc
67,261 posts
134 months
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johnfm said: Eric
You want banks to lend more AND you want more regulation.
BUT part of this 'more regulation' wants bansk to hold more capital reserves - which means , as you say 'banks sit on their funds'.
So - it seems you want more lending, but also more regulation - which are at odds.
Banks want to make profit. If lending to SMEs is profitable, they will do it. If they don't see it as profitable, they won't. Why is lending more and BETTER (not more) regulation incompatible? Why is lending more AND better governance of the industry incompatible? Banks aren't lending because they don't think lending is profitable. They aren't lending because they have now become ultra-conservative regarding the state of their balance sheets - compared to the way they were before, rather careless about their balance sheets - or using tricks to disguise the unhealthy state of their balance sheets.
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Guam
15,466 posts
137 months
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Murph7355 said: Banks aren't as prudent as perhaps they ought to be with respect to who they lend to. Result = widespread moaning and bashing. Banks are as prudent as perhaps they ought to be with respect to who they lend to. Result = widespread moaning and bashing. It's a funny old world And comforting to see the Daily Mail and myriad internet commentators are expert enough that we needn't worry about any damage to our finance sector as there are plenty of people who'll step up to the plate (starting with Dave I guess). I agree with you 98% on here Murph as you know, the issue with the SME's is a bit of a peculiarity right now. I get why the banks are doing it and I dont need their dosh for anything of consequence. But it is a tad hypocritical of them to be demanding levels of personal guarantee that are unjustified on many businesses given their track record, asset base, strength of balance sheet and low level of liabilities etc. If the same criteria were applied to them, they apply to others, they would all have lost their homes when the tide went out <to paraphrase Warren Buffet>. Otherwise keep up the good work
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Eric Mc
67,261 posts
134 months
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It is probably the single biggest area where current bank behaviour is affecting the economy. Small businesses are the lifeblood of the UK economy and at the moment the banks are restricting the oxygen supply to that lifeblood. If the banks are getting their houses in order - which they probably are - it is this specific area that they need to address as quickly as possible.
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