"The Bank of England is to offer money to high-street banks to kick-start mortgage and small business lending to prevent loans being rationed for many families and entrepreneurs, the Chancellor announced.
It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis.
Sir Mervyn King, the Bank of England Governor, said that the “industrialised world have thrown everything bar the kitchen sink” at the global economic meltdown but that even “bolder action” was now required.
In the annual Mansion House speech in the City, the Chancellor said he was no longer prepared to “stand on the sidelines” and that the radical new “bank funding scheme” will be launched within weeks.
“We are not powerless in the face of the euro-zone debt storm,” Mr Osborne said. “We can deploy new firepower to defend our economy from the crisis on our doorstep. Funding for lending to the family aspiring to own their home and the business that wants to expand…The Government - with the help of the Bank of England – will not stand on the sidelines and do nothing as the storm gathers.” "
He added: “We are rolling up our sleeves and doing everything possible to protect British families and firms.”
The bank funding scheme will allow high-street banks to temporarily “swap” their assets, such as their mortgage books, with the Bank of England in return for money they can loan to customers. (AtW's comment: now banks can safely swap mortgages in "assets" like flats that proper dropped for lots of dosh they can lend at high rates - genius!
)
It is the latest attempt – following the cut in interest rates to record lows and the £325 billion quantitative easing scheme – to kick-start the British economy following the start of the financial crisis four years ago.
The scheme should also help British banks shield themselves from the impact of the eurozone crisis – as they will not have to rely on international finance markets to raise money, which is currently difficult.
Sir Mervyn said that the “euro area crisis” has created a “large black cloud of uncertainty hanging over our economy”.
He added that the “ugly picture” had created “formidable challenges” and that despite trillions of pounds being pumped globally into the economy over the past two years “we are back to where we were”.
Speculation mounted that the Spanish government will require a full-blown government bailout after the country’s borrowing rates rose above the psychologically-important rate of seven percent.
The country has already been offered a 100 billion euro “line of credit” to help Spanish banks by their European counterparts – but international investors do not believe this is sufficient.
This weekend, Greece will again hold elections and there are fears that parties refusing to support austerity plans will win the balance of power – which could lead to the country being forced out of the euro.
World leaders will meet for the G20 summit in Mexico next week when Angela Merkel, the German Chancellor, and other European leaders will be under intense pressure to solve the ongoing crisis in the single currency.
Mr Osborne reiterated warnings that Greece may have to leave the euro before the economic chaos can end.
Source: Osborne unveils £140bn scheme to kick-start stagnant economy - Telegraph
So there you have it - more money printing, yet again to help banks make hefty profits and pay big bonuses.
I've seen this sort of tulip in ex-USSR - Govt giving cheap printed money to banks to supposedly lend to companies that needed it. What actually happened? Banks were not as fooking stupid as this Chancellor and Sir Merv so they anticipated inflation from such moves and put money into stuff that can save it (foreign currency - USD) OR some commodities market.
Better refuel your car this Friday - oil will be going over $100 again shortly...
It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis.
Sir Mervyn King, the Bank of England Governor, said that the “industrialised world have thrown everything bar the kitchen sink” at the global economic meltdown but that even “bolder action” was now required.
In the annual Mansion House speech in the City, the Chancellor said he was no longer prepared to “stand on the sidelines” and that the radical new “bank funding scheme” will be launched within weeks.
“We are not powerless in the face of the euro-zone debt storm,” Mr Osborne said. “We can deploy new firepower to defend our economy from the crisis on our doorstep. Funding for lending to the family aspiring to own their home and the business that wants to expand…The Government - with the help of the Bank of England – will not stand on the sidelines and do nothing as the storm gathers.” "
He added: “We are rolling up our sleeves and doing everything possible to protect British families and firms.”
The bank funding scheme will allow high-street banks to temporarily “swap” their assets, such as their mortgage books, with the Bank of England in return for money they can loan to customers. (AtW's comment: now banks can safely swap mortgages in "assets" like flats that proper dropped for lots of dosh they can lend at high rates - genius!
)It is the latest attempt – following the cut in interest rates to record lows and the £325 billion quantitative easing scheme – to kick-start the British economy following the start of the financial crisis four years ago.
The scheme should also help British banks shield themselves from the impact of the eurozone crisis – as they will not have to rely on international finance markets to raise money, which is currently difficult.
Sir Mervyn said that the “euro area crisis” has created a “large black cloud of uncertainty hanging over our economy”.
He added that the “ugly picture” had created “formidable challenges” and that despite trillions of pounds being pumped globally into the economy over the past two years “we are back to where we were”.
Speculation mounted that the Spanish government will require a full-blown government bailout after the country’s borrowing rates rose above the psychologically-important rate of seven percent.
The country has already been offered a 100 billion euro “line of credit” to help Spanish banks by their European counterparts – but international investors do not believe this is sufficient.
This weekend, Greece will again hold elections and there are fears that parties refusing to support austerity plans will win the balance of power – which could lead to the country being forced out of the euro.
World leaders will meet for the G20 summit in Mexico next week when Angela Merkel, the German Chancellor, and other European leaders will be under intense pressure to solve the ongoing crisis in the single currency.
Mr Osborne reiterated warnings that Greece may have to leave the euro before the economic chaos can end.
Source: Osborne unveils £140bn scheme to kick-start stagnant economy - Telegraph
So there you have it - more money printing, yet again to help banks make hefty profits and pay big bonuses.
I've seen this sort of tulip in ex-USSR - Govt giving cheap printed money to banks to supposedly lend to companies that needed it. What actually happened? Banks were not as fooking stupid as this Chancellor and Sir Merv so they anticipated inflation from such moves and put money into stuff that can save it (foreign currency - USD) OR some commodities market.
Better refuel your car this Friday - oil will be going over $100 again shortly...
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