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I vill say zis only vonce

Community Veteran
Posts: 3,826
Thanks: 44
Fixes: 1
Registered: 24-09-2008

I vill say zis only vonce

Darling going to Banks to ask why the interest rates are so high and why Banks are not lending to industry
Two simple reasons
Regulation
The Government and the FSA have instigated regulation into how much cash banks must keep in reserve Most of the taxpayers bail out cash has been forced by regulation to be kept as a reserve.
Supply and Demand
If you were a saver where would you put you spare cash, with a state controled bank paying half of 1% interest, or with a Building Society paying 5% interest for 5 years. Nil points for getting the answer.
This is not a local issue:- When interest rates started falling offshore depositors with funds in UK banks started shifting their money off shore.
To counteract this, the government bought in QE (printing of money), you can guess what happened, the funds generated either just go straight off shore, or has been ‘laundered’ back into buying government bonds.
This is not rocket science its common sense. But then if sense were common MP’s would have some of it.
Simple concept:- LBYM not LAYM - The BOE Policy unit is now chasing policy not formulating it.
I'd paraphrase Private James from Dad's army, but you've all heard it before