When will loan markets return to former levels?
News that the government is pushing for lending liquidity to return to 2007 levels in exchange for bailing out a number of the UK's largest banking operations has been welcomed by consumer groups. But when will it kick in? When will we actually see markets start to move?
The news of the government initiative has been welcomed after the announcement that 5 million loan and credit card applications were rejected in the UK over the last 6 months. This figure is absolutely enormous and reflects the fragile nature of the markets which have literally frozen over the last few months.
The above figure equates to 3.27 million credit card applications and 1.56 million loan applications or in more basic terms, 27,000 refusals a day!
As more and more people are pushed into financial hardship it seems that these rejection figures will only get worse in the short term. Those who believe that the banks will soon roll out the red carpet to every applicant will also be in for a serious shock with the financial sector adamant that it will not return to the days of increasing bad debts and low quality loans.
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