Lord Lamont of Lerwick
Main Page: Lord Lamont of Lerwick (Conservative - Life peer)Banks: Business Lending
Lord Lamont of Lerwick Excerpts
Lord Sassoon
My Lords, the first thing that we have to do is to recognise that the reason why both the Government and the banks were overleveraged, let alone investing in inappropriate products, was at heart a failure of regulation. So the first step that we have taken is to completely overhaul the financial regulatory system to make sure that banks do not get the country into the financial stability crisis that we inherited. The second thing that we have to do is to make sure that banks are enabled to rebuild their capital base so that they can have a secure capital base on which to lend to small and medium-sized businesses in particular. We have set out a range of measures on that, including in the Budget and the Green Paper earlier this week.
Lord Martin of Springburn
My Lords, will the Government encourage the banks to give more support to credit unions, which help the poorest in our communities throughout the United Kingdom?
Lord Sassoon
My Lords, as part of the absolute focus that the banks must have on growing loans to small and medium-sized enterprises, credit unions have an important part to play.
Lord Higgins
My Lords, is my noble friend not concerned that the massive increase in quantitative easing has not been reflected at all in the figures for the money supply, which has actually gone down? It is not surprising that the banks are not lending more if the money supply is declining. What does my noble friend think ought to be done about this?
Lord Sassoon
My Lords, I will be brief. I would say that the best indicator of the state of bank lending is to be found in the Bank of England’s July Trends in Lending document, which shows that in 2009 bank lending decreased by £45.6 billion and in January to May this year by £11.1 billion. I suggest that the proof of the pudding is in the eating.