Alistair Darling announces new banking watchdog
Alistair Darling has today announced more detail regarding his attempt to hand power back to UK businesses that are refused credit through the UK banking system. He has also announced plans to reduce bonuses already agreed at Lloyds bank and Royal Bank of Scotland if executives miss new lending targets. But are these two issues really credible?
While there is no doubt that many businesses reacted with relief when the UK government announced plans for an appeals system regarding failed loan applications, what exactly can the government do?
Despite earlier suggestions that the new regulator would have the power to force banks to lend to customers previously rejected, the authorities have today backtracked and suggested "errant" lenders could be fined if they are seen to refuse acceptable credit applications. The truth is that this will not help UK businesses and will indeed take more liquidity from the marketplace and ultimately impact upon the level of funding available.
The issue regarding bonuses for Lloyds bank and Royal Bank of Scotland executives is also something which has been hogging the headlines for some time although ultimately recent agreements have been reached and are unlikely to be amended in the future. It seems that the UK government is "kicking these ideas into the long grass" for discussion in the future at an undetermined date. Political manoeuvring?
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