Alistair Darling ponders on how to get the bank's lending

Alistair Darling ponders on how to get the bank's lending

The UK Government has said they are contemplating further plans to encourage UK banks to increase lending to businesses and households.

Alistair Darling, Chancellor said that injecting more taxpayers money into banks was not the “first port of call”. The Chancellor also added that they will be holding further talks as to what steps they should take to kick start lending.

Reports have said that the Treasury is looking into an insurance scheme where banks would pay a fee to reduce possible losses on bad loans.

This could encourage the banks to resume lending more freely because they would have a clear picture of what losses they could face, with the government sharing the risk.

The key to the economic recovery would be for easily obtainable credit for homeowners and businesses, however, Alistair Darling has said that although the banks have began to lend again it’s not at the level the government wants to see.

Source: BBC

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