Government ‘may have to force banks to lend’

8 January 2009

The Government may have to force banks to offer more loans and mortgages if the current situation continues, according to a leading economist.

Jonathan Loynes, Chief European Economist at Capital Economics, said: “[The government has] got to ... encourage [banks] or perhaps even force them to actually lend ... money into the wider economy so that households and companies can operate in a normal way.”

He added that reducing interest rates and increasing funds for loans were “all very well”, but said that promoting lending has to be a top priority.

Loans have been in relatively short supply in the past 18 months, as banks have experienced a combination of limited funds for loans and reduced confidence in lending.

A loans expert for Think Money said: “Loans are more difficult to come by than they were, perhaps, 18 months ago, but they are still very much available. We recommend people looking for a loan contact a loans adviser to improve their chances of finding the best deal.”

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Think Money work with a panel of lenders to offer a range of loans. If you are thinking about getting a loan, contact one of our expert loan advisers today.

Tags: loan, loans, banks, government, capital economics, getting a loan

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