Alistair Darling threatens UK banks with competition enquiry
Alistair Darling today stepped up his assault on the UK banking sector after calling all the major banking leaders to a summit at number 11 Downing Street. He effectively threatened the UK banking sector with a competition enquiry if the banks do not start to increase their lending as they had agreed to do so during the recent bailout.
After presenting banking leaders with data which appeared to show the UK banking sector has failed to pass on cheaper lending rates, despite UK base rates at historic lows, he has given them some time to think about the situation before they meet again. The hint that the Treasury would look into the competitiveness of the UK banking sector if increased lending liquidity was not forthcoming, was a vague threat, but a threat all the same. So will the government really take on the UK banking sector?
The fact that the information from this "confidential" meeting has been leaked to the press would suggest that the government does not feel that political pressure alone can make things happen. This is a technique which we have seen over the last few months, including the very public and often brutal assault on Sir Fred Goodwin.
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