Why do the UK banks need further funding?

While there is no doubt that the UK economy continues to crash and burn, there is very serious debate across the country as to why the UK banking sector requires special attention and massive funding yet again. There is an argument that many of the problems being experienced by the banking sector have been brought on by greed over the last decade which has seen the quality of loan books reduced and profit margins get tighter and tighter.



When you compare this against many other areas of the UK economy which are struggling through no fault of their own there is a growing rejection of the call for further funding for the banking sector to the detriment of everybody else. When you consider that the UK banks initially suffered because of the sub-prime mortgage market collapse, which many people saw coming, and now appear to be suffering because of an overextension into the commercial property market, who really is to blame?



The recent refusal of a number of financial institutions to pass on future base rate cuts to their customers has further inflamed the situation and emotions are running very high. The UK government will need to put forward a seriously strong argument to get the backing of the UK public.