Treasury talking tough over banks

By William Green on Nov 26, 08 03:31 PM

Could the Government be getting fed up with the banks failing to lend despite getting a massive dollop of our money to keep them afloat?

If the comments of Treasury Minister Ian Pearson are anything to go by, it seems the Government is now threatening the banks to act or else.

"We will continue to want to hold banks' feet to the fire to make sure they do the right thing by small businesses and by people who want mortgages for the future," said Mr Pearson.

He was responding to questions from Newcastle Central MP Jim Cousins at a meeting of the Commons Treasury sub-committee this morning.

The Labour MP said it was a "dramatic phrase" but the reality stood in "great contrast" to the Minister's words with conditions attached to the bank bailout failing to work.

"Nothing has changed and the drama of the language only emphasises that point," said Mr Cousins.

Mr Pearson said it was not acceptable for bank chiefs to tell the Prime Minister one thing and lending practices "down the line" showed no recognition of what they were telling the Government.

"We as a Government can't accept a situation where are being told one thing and actually something completely different thing is happening," he added.

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