Should banks be supporting UK consumers?
The subject of whether UK bank should be supporting UK consumers at his most difficult of times is a topic which has grabbed the headlines over the last few weeks. On one hand on the government is suggesting that banks should reduce their risky investment, while on the other they are adamant that cheaper loans and cheaper finance should be made available across the board. This is a very difficult situation for the banking sector and one which could drag on for some time.
While the UK banking community would love to increase lending in the short to medium term and therefore increase their profitability, they are still very anxious about the state of the UK economy, the property market and the employment market. There are concerns that over lending could backfire spectacularly in the short to medium term and put UK banks in a more precarious position with UK government effectively unable to assist. They would much rather prefer the UK economy to show significant signs of recovery, at which point they would then look to increase lending activity, but so far the signals have been very mixed to say the least.
Short-term caution could give way to medium term optimism if only the banks were able to take positive signals from the vast majority of economic surveys released to the market. When this will happen is anybody's guess!
Share this..
Related stories
FSA liquidity changes could cost banks £9.2 billion year
The Financial Services Authority (FSA) has today come under attack for proposed liquidity changes to the UK banking system. As we covered yesterday, the FSA is looking to introduce more stable assets as collateral for money market transactions and overall balance sheet strength. This would see UK banks forced to acquire more and more assets such as Treasury bonds and other "near cash" investments...
Read MoreCitigroup shares plunge as board ponders future
Shares in Citigroup ended the day 18% lower after the announcement of an emergency board meeting to discuss the future of the group. The shares have more than halved in value this week as the troubles on the global stock market continue to weigh heavily on the US giant. Despite suggesting that the group still has a strong capital base and liquidity position it is understood that the board is consi...
Read MoreEuro bounces back from four year low against the dollar
The troubled Euro has bounced back from a four year low against the dollar amid concerns that budget cuts across Europe will impact upon growth in the euro zone in the short to medium term. The currency hit a low of $1.2237 to the dollar in early trade but rebounded to a level of around $1.2377. However, the concerns about the euro zone persist. Since the Greek debacle hit our screens only a fe...
Read MoreCadbury rejects £9.8 billion offer from Kraft Foods
UK giant Cadbury has today rejected a £9.8 billion takeover offer from US conglomerate Kraft Foods which values each Cadbury share at around £7.20 a share. While the terms are the same as the indicative offer just a few weeks ago the fall in the Kraft Foods share price has reduced the value from £7.45 a share to £7.20 share. So what next for Cadbury?
When you bear in mind the C...
Royals 'cost each taxpayer 66p a year'
The royal family cost the British taxpayer around £40 million in the 2007/08 financial year, a new report reveals.This is equivalent to 66p of each person's annual tax bill - up from 2006/07's total of 62p.A rise in royal transport costs was blamed for the increase, although royal representatives claimed that the cost remained 3.1 per cent below that of 2001, in real terms.Keeper of the privy pur...
Read More