20
Feb
Call for government to make banks lend
Liberal Democrat Treasury spokesman Vince Cable has called for the
government to do more to ensure that the Royal Bank of Scotland and
Lloyds TSB lend more money.
Mr Cable made the call following the publication of Office for
National Statistics figures revealing that the recapitalisation of
the two banks is being treated as a transfer of funds from one
section of the public sector to another.
Stating that the government has "in effect" nationalised the two
lenders, he remarked: "Ministers must now accept the reality that
they effectively own two large banks and use them to ensure the
flow of much needed credit into the economy."
Such a move could help increase the level of mortgage finance being
made available.
Last month chancellor of the exchequer Alistair Darling revealed
that the officially nationalised Northern Rock was to reverse its
policy of running down its mortgage book.
