Project Merlin - propaganda

[Digga]

This was never going to end well, but I can see it becomming a major source of embarassment for the government.

http://uk.reuters.com/article/2011/05/23/uk-britai...

Reuters said:

Britain's largest banks were largely on track for meeting their loan targets under a deal with the government, although the share in lending to small firms fell short in the first three months of this year.

[b]...lending facilities to small and medium sized businesses came in at 16.8 billion pounds -- around 2 billion pounds short of target.

The banks blamed the shortfall on weak demand from small businesses...[/b]

The usual hand-wrionging from the govt and the usual circular arguments (excuses) from the banks. (Neither side can ever hope to find tangible proof for or against.) Will the govt use this as a platform to launch another money-grabbing attack on banks?

This is an open sore that refuses to heal.

[crankedup]

Digga said:

The usual hand-wrionging from the govt and the usual circular arguments (excuses) from the banks. (Neither side can ever hope to find tangible proof for or against.) Will the govt use this as a platform to launch another money-grabbing attack on banks?

This is an open sore that refuses to heal.

The Government will be considering a further taxation upon banks if the loaning targets are not met. Tax as a form of punishment.

[ringram]

Utter rubbish. Loan targets are pointless.

That being said taxing TBTF banks equivalent to the amount of implicit subsidy they get from reduced funding costs is an excellent idea.

[loafer123]

crankedup said:

The Government will be considering a further taxation upon banks if the loaning targets are not met. Tax as a form of punishment.

On the one hand they are saying .... "lend, you must lend..."

On the other hand the shareholders (incl Government) is saying ... "deleverage, now..."

On the same hand the regulator is saying ... "for every new loan you need to hold twice the capital"...

Punishment is great if you can avoid the crime, but in this case the banks cannot...

[Digga]

Guam said:

The Banks are right, most smart SME's are drawing debt down and have been for some time.

Not all.

Guam said:

Couple that with the Banks now demanding everything carries a guarantee on your House (even though the Business may have adequate security). Then demand will remain weak.

Which the banks will simply attribute as a 'acl of demand' in their recorded data. Of course if the terms become tight enough, demand will certainly be zero.

ringram said:

Utter rubbish. Loan targets are pointless.

Quite, and the discussion about how you prove those you didn't loan to were not viable, or measure the 'demand' for loans is a whole other issue.

[Legend83]

Not adding much to the thread but the guy from the Small Business Forum on BBC breakfast this morning was my best mate! Well done Al!

[crankedup]

anonymous said:

[redacted]

I do think that what the Government is attempting is reasonable, they have hung their coat on Growth as a big part of their strategy to get us out of the mess. Banks signed up to 'Merlin' so assume that the numbers add up for them. Banks are supposed to be good at assessing loan risk, so now being put to the test, I don't know what the percentages are on the loses that the banks have factored in but you can bet it leaves them with a mild headache if worst was to occur. Or maybe I have the wrong end of the stick.