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Nick Robinson's Newslog

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Banks to lend more

  • Nick
  • 19 Nov 08, 04:35 PM

Sure enough, Downing Street says there will be new measures to get the banks to lend more to small businesses in next week's pre-Budget report.

This on the day the Lib Dems suggested either the creation of a new national bank to supply affordable credit at prudent levels or the use of local councils or the Post Office to distribute state funds directly into struggling companies.

David Cameron at PMQs and a Tory briefing note referred to "the establishment of new institutions to underwrite lending". However, the party now says they don't mean a new institution like a bank - they mean "new government guarantees" to underwrite loans to businesses.

A nationalised national bank?

  • Nick
  • 19 Nov 08, 02:55 PM

Are we going to see the creation of a nationalised national bank to give loans to businesses that the commercial bank simply will not give?

I ask the question because first David Cameron and then Nick Clegg raised the idea of the government directly lending to businesses that probably can't get the credit they need to stay in business.

Noticeably Gordon Brown didn't seem to knock the idea down. Instead he said that you needed fiscal action, government spending in other words, in order to help small businesses in the way they said was necessary. This is intriguing. Much more work to be done to work out what's really going on.

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