Banks 'must lend to small firms'

[Power Lunch Club]

Never a truer word spoken

We really are all in danger here....I am waiting to get paid by several firms....who all have cashflow problems, they are not being paid, there not paying their suppliers, and several can't get short term overdrafts or llong term finance for bigger projects. Have they no idea what they are doing by not lending?

Businesses are going (not going too go later but now) insolvent....not because of lack of sales, but cashflow.

My accountant always says the three most important things in business are....Cashflow, cashflow, cashflow!!!

BBC NEWS | UK | Banks 'must lend to small firms'

The Lid Dem leader Nick Clegg talks about other outlets for funding even the possiblity of the goverment setting up a new bank...something I said was need for some time.

[davidc]

You are right. The 2 biggest problems at the moment are lack of liquidity and consumer confidence. Even companies with cash reserves are slowing payments to extend their survival times, as this situation keeps getting talked down all the time. The banks will have to start lending again otherwise this could spiral out of control.

[Power Lunch Club]

Originally Posted by davidc

You are right. The 2 biggest problems at the moment are lack of liquidity and consumer confidence. Even companies with cash reserves are slowing payments to extend their survival times, as this situation keeps getting talked down all the time. The banks will have to start lending again otherwise this could spiral out of control.

Thanks for that David...I personally think it already is already out of control!! Business is willing, banks are being uncooperative and governments lack any balls with with to beat them up and get acting....heck the government (=we) already own then....why can't they do as they are told!!

[TFGtv.com]

Trustee Savings Bank - Wikipedia, the free encyclopedia

Building society - Wikipedia, the free encyclopedia

Demutualization - Wikipedia, the free encyclopedia

The banks don't HAVE to do anything.... And that’s the problem...

For instance (from that Wikipedia page); in relation to the demutualisation of the building societies....


"A movement arose whereby investors would open a savings account with a mutual building society, thereby getting voting rights in the society, and
pressurise for a vote on demutualisation, with the intent of getting a windfall payment as a result. A number of societies' members and managers were very unhappy about such investors, who were termed carpetbaggers, maintaining that as mutual societies, they could supply better and cheaper home loans than the banks and demutualised societies, as they only had to make a profit to cover their operational costs, and had no need to generate an additional profit to return to shareholders."


....They only had to make a profit to cover their operational costs.

And there’s the rub. When the Building societies were demutualised. When the water electricity and gas boards were privatised, when GPO telephones was mutated into BT you added another variable to the equation...

Profit, for the benefit of Shareholder and management and as much of it as possible. And no matter how you twist and turn that profit is an extra mouth to feed. And that mouth can only ultimately be fed by the consumer. And as these are essential things for modern life the consumer has no choice but to feed that ever more hungry mouth.

Much as my instincts are to rail against state control and interference the crisis we face today is the inevitable result of destroying the order and control that existed within these core services. Clearly at the heart of each of these things was what is essentially the core of a commercial organisation. But those organisations only existed to serve what had become a core function of society.

At the heart of the problem is the simple fact that what was created and run for the benefit of the many is now possessed by and benefits the few.....
No the banks DON’T have to do anything. Because at the heart of their interests is the greed of individuals and perversion of the purposes for which these institutions were set up in the first place....

The only way forward here is for the banking and other core industries to come under massive change. Whether that comes from changes in the law that effectively re-nationalise and re-mutualise them. Changes from within that do the same. Or the collapse of the current system and riots inthe streets..

But right now the banks don’t HAVE to do anything.... Which is where the problem lies!

[davidc]

I must admit that last August when this situation started I thought here we go again. I have seen 2 recessions before, and you just tighten the belt and trade out of it. This time I must admit it is very different with problems in so many areas and countries. Unfortunately we are living in a once in a lifetime event. We live in Spain, and literally every day I hear about another business going bankrupt. The locals here have never had this before as even the pensioners are skint because the pound is almost on a par with the euro. I deal in property, and the market stopped as quickly as a tap being turned off. i have contacts in America, mainland Europe, and all round the UK. I would love to talk to someone positive, as that has not happened in weeks. I partly blame the media as well. It creates a dilemma. Should the media be "encouraged" to be more positive? This then infringes on free speech which I am sure we all believe in, but again looking at the big picture, the media is largely responsible for the doom and gloom. Unemployment is rocketing at the moment, but most people are still in employment, and will remain so. Every day people are told on tv and in the newspapers that the end of the world is coming. Every day people are being programmed to just sit in their houses and save every penny they have. Unfortunately bad news sells........We are now facing a depression, and not a recession. Do governments borrow huge sums of money to shore up economies, and then face years of high taxes to recover, or let the markets crash quickly, and then hopefully recovery will be quicker? Sorry for harping on, but I feel so sorry for the pain this is going to a lot of families around the world.

[barryhynd]

David,

I dont think your harping on, it's a feeling i'm sure my people are experiencing at present. This is the first time I have really went through this in the sense that we have bills coming in and mortgages to pay etc.

It's a vicious circle because what the economy needs is for people to spend to instill a bit of confidence in the economy. With people losing their jobs etc most people simply aren't spending so this puts pressure on retailers etc.

Given that I work in a commercial environment I feel I also have to point out that not all banks are not lending. Some still are and have appetites to do deals (albeit the right ones!). There are some small signs that things are picking up, mortgages for one have went up slightly over the past few months. With the private sector not spending the only thing the government can do is to ramp up public spending and borrowing to try and give the economy a kick.

[barryhynd]

A really interesting article today on the BBC website regarding the above which helps to explain a little about what issues the banks are having. The main point seems to be that this £37bn recapitalisation hasn't actually been given to the banks yet.

There's also calls from some quarters to name and shame the banks who are not lending.

BBC NEWS | Business | Banks 'must kick-start lending'

[Power Lunch Club]

And about time too!!

BBC NEWS | Politics | Darling 'to force banks to lend'

[TomB]

its about bloody time too!

I mean the banks quite happily took a £37bn handout from us why shouldn't they be forced to return the favour.

It should have been a clause in the money anyway if you want the money they you have to lend to the public.

makes me so mad

And don't even get me started on those greedy, lazy energy companies.

T

[frockery]

And despite the base rate reduction of 1.5% earlier this month, there are still a number of lenders sitting on their hands and refusing to pass it on.