What I find interesting are the calls from politicians to the banks to resume/increase their supply of credit to viable SMEs, but it's never (and I
Posted by
Loyola
Dec 14 '09, 08:49
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doubt if it can be) couched in terms so as to make it measurable as to whether or not the amount of credit supplied to businesses is fulfilling this request.
Is the resumption of the flow of credit to 50% of 2006 levels acceptable to the politicians, is it 70%? Not even they know.
So governments make this request, and bankers always retort in nominal terms; this year we lent out xbillion to SMEs, with no reference as to that % this represents of levels during the boom.
Politicians making this request don't know what level is acceptable, and the banks have surely shown their ineptitude at determining whether a business is viable or not so as to warrant the supply of credit. What a nonsense.
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