johnbee

U.K. at Impasse Over Bank Lending

I am English. The situation in the UK is that Banks are now just sitting on Government lent cash to cover their backsides from going bust. Worse, they are also demanding loans back from perfectly good small businesses with the prospect of ruining many thousands of them, and cutting credit card limits viciously even from the best of customers or demanding much higher rates to cover their previous negligence.

In my view since in effect without Government support all UK banks are insolvent due to their incompetence they should have their licences to trade withdrawn and be taken over by the Government or be told to trade as mutual societies for the bnefit of their savers and customers.

For two centuries many UK banks and savings societies and building societies (S&L's) - along with most insurance companies- were run as mutual organisations until the last decade when a rash of taking them public came about, inspired by the greed of the directors who persuaded depositors unwisely to take shares, and its all been downhill from there.

Without savers or interest rates there can be no borrowers and savers who invest in non profit mutualised companies will feel a lot more inclined to save. In turn the management, who will have no purpose to line their pockets with fake bonuses from fake instruments of profit, may make the sort of consdered loans they were once taught to make to help local interests with people they trusted.