20 Feb

Call for government to make banks lend

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.

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