What?

\”The government will also establish a “fast track” credit adjudication service so that those denied credit by banks can appeal against the decision, Darling said. The new service would have legal powers to overturn bank decisions, he said.\”

Hunh?

How in buggery would this work?

A bunch of bureaucrats will be given the power to force banks to lend money to specific people?

What?

19 thoughts on “What?”

  1. It’s how this started in the first place: being forced to lend to people who fail to make the payments.

  2. Yes, Bernie is right. This is exactly how the bad loan crisis took off in the USA, with the government forcing lenders to set aside normal actuarial assessments, and lend money to folk who demonstrably couldn’t pay it back.

  3. Of course, when it all goes pear-shaped the gubmint won’t turn round and blame the banks, confiscate their bonuses and nationalise a few more of them.

    Will they?

  4. Can this country get more like the one portrayed in Atlas Shrugged? How bizarre the entire scheme sounds. I ask the bank for a loan, they say no, your business plan isn’t good enough, or there’s a good chance you won’t repay us, or any one of thousand and 1 reasons, and I go to some tribunal, complain, and they force the bank to to lend money to someone they don’t want to lend to. What happens if I default? Does the State pick up the tab?

    This is a corruption of finance. It won’t be the best firms that get credit, but the ones with good contacts, the ones who can get politicians to lean on the ombudsman. It will be a nightmare of cronyism, nepotism and fraud. I bet firms that have donated cash to Labour would never be denied credit……….

    This country stinks to high heaven now. The stench of decadence, graft and downright criminality is overwhelming. We need a Hercules to sweep away the entire rotten system and start again from scratch. Some hope of finding one in our current electoral options.

  5. The Pedant-General

    “What happens if I default? Does the State pick up the tab? ”

    So I, as a taxpayer, am forced at the point of a gun to pay for something that I wouldn’t have agreed to, the bank actually didn’t agree to and you shouldn’t have entered into in the first place.

    What could possibly go wrong?

  6. “It’s how this started in the first place: being forced to lend to people who fail to make the payments.”

    Bernie, shhh. You’re not allowed to say that. They were ‘disadvantaged’ so must not be implicated in any way, and never mind if there are no ‘lessons learned’.

  7. Oh come on. I defer to no one in my loathing of this government but it’s not about loans. It’s about people whose credit records and credit score is so poor no bank will take them on even for a basic no-overdraft, no cheque book account. Because their marketing people say they can’t cross-sell product to such account holders.

    Which is a real problem for some – and before you all drop on me like a ton of bricks I’m not excusing them – those who for whatever reason can’t show a bank account. Because employers don’t generally pay in cash any more… capisce?

    So whether you were unfortunate, negligent, stupid, or unlucky, or all of those things, the lack of a bank account stops you getting a job.

    Generally, I resent the idea that government can weigh in and force anyone to do anything but surely to god even the dimmest person here can see that once banks took that good ole taxpayers’ cash, they were on the hook for whatever the government wanted.

    And in reality, I think this is a good idea. No overdraft, no loan, no cheque book, but an account that lets you set up a direct debit, a standing order, and have a debit card for cash withdrawal. It’s up to the bank how they make money out of it but if you believe in competition and the market, someone will figure it out.

  8. @formertory: er no. From the Treasury Budget documents section 3.43:

    “To help SMEs that need access to credit, the Government has today announced the
    creation of a new statutory Small Business Credit Adjudicator. The Adjudicator will work closely with a newly enhanced Business Link Financial Intermediary Service,13 in order to
    ensure that SMEs are treated fairly when applying to their bank for finance. The Adjudicator
    will have statutory powers as soon as possible to ensure that the judgements its makes are
    enforceable.”

  9. Err? Call me stupid if you will, but isn’t lending money to people who shouldn’t be borrowing money what caused the current banking crisis in the first place?

    Why isn’t the MSM pushing this bit of moronity as a prime example of why Darling’s budget was a massive clusterphuque?

  10. Ah, mea culpa. I guess I’d better go find the naughty stair.

    I confused this with the proposals to require banks to open cut-down current accounts for those individuals who they currently refuse.

  11. I don’t think that this measure is worth getting too excited about…

    If the procedures involved in going to this new adjudication service are as arcane and convoluted as those encountered in dealing with other government “help” agencies, any SME that’s had its request for a loan turned down will almost certainly have gone bust before the adjudication service “springs into action”.

  12. This makes perfect sense.

    Britain will lobby its partners among the Group of 20 industrialized countries to impose a systemic-risk tax on banks, Chancellor of the Exchequer Alistair Darling said today.

    If they’re taxing risk, it is in their interest to have more of it.

  13. If you are worried about this, imagine what the gummint will do for disadvantaged folk who can’t find anyone to have sex with them.

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