From the exemplary Robert Peston, on the deal which sees £37 billion of taxpayer’s money buy big stakes in our big banks:
"RBS and Lloyds TSB/HBOS have promised to the government that they’ll
maintain mortgage lending and small-business lending at 2007 levels –
which is massively more than they are currently lending (this is hugely
significant – given that a shortage of credit is to a large extent
behind the economy’s deceleration into recession levels)"
As Robert says, this is massive. At the launch of Small Business Week 2008 this morning at the BT Tower, the repeated refrain from panelists was the need for banks to lend to small businesses. Without loans, it’s much harder for businesses to expand or diversify – things which they need to do during tough times.