Bank of England may shift to 'heavy-duty credit easing'

tomterm8

Joeskeppi wrote: »

What does "heavy-duty credit easing" mean?

It means the government would subsidise credit in specific sectors through government guarantees or actually paying banks to lend money... and, it has already been tried in the UK to a limited extent by the last labour government, without much in the way of success.

I think the private sector is still deleveraging, and so it will be very hard for credit easing to get traction as a policy.

Generali

tomterm8 wrote: »

It means the government would subsidise credit in specific sectors through government guarantees or actually paying banks to lend money... and, it has already been tried in the UK to a limited extent by the last labour government, without much in the way of success.

I think the private sector is still deleveraging, and so it will be very hard for credit easing to get traction as a policy.

Cutting the price of something won't have much impact if price isn't the reason they stopped buying.

I want to paint the Generalissimos' bedroom and won't be using lead paint on the wood as was once the norm. My reason for doing so has nothing to do with price.

The reason people aren't borrowing IMO is that they don't want more debt. The reason companies aren't borrowing IMO is that they don't see opportunities. Making debt cheaper is unlikely to persuade either group to borrow more.

LydiaJ

While this forum (named "house prices and the economy" in that order) tends to focus on house prices, I don't hear politicians banging on about house prices. Most of what they seem to say about the economy is about growth, or business (both big and SME), or the deficit, or the cost of welfare. I just don't think HP are going to be at the centre of the government's economic decision making.

Emy1501

The government is already lending for housing through NR as far as I'm aware. They seem to offer near the most on affordability and multipliers etc.

I can't see the BOE or the government going against FSA guidelines and forcing banks to lend to those who can't afford it. There maybe some argument in favour of those being turned down for the odd late payment or the odd default which they did not know about or are arguing about but these will not solve the mortgage problems.

People with good a credit history can get a 90% mortgage at 3x joint.

ILW

What mortgage problems?

des_cartes

HAMISH_MCTAVISH wrote: »

http://uk.finance.yahoo.com/news/bank-of-england-may-shift-to-heavy-duty-credit-easing-says-rate-setter-adam-posen-tele-cd2e508d8174.html?x=0

I doo think the government and the boe could interfere in the credit markets to help small and medium sixed businesses obtain credit. There is no chance that this government would interfere with the housing market though as they have already stated clearly that the next 5 years will be focused on rebalancing the economy from unproductive debt to investment in wealth creation. Mr Cameron has made it perfectly clear to President Obama that the UK will be paying down debts over the next 5 years unlike America which continues to pour money innefectively into it's falling housing market.

dopester

des_cartes wrote: »

I doo think the government and the boe could interfere in the credit markets to help small and medium sixed businesses obtain credit.

The banking system is awash with money to invest in opportunities the applicant can provide a convincing business plan.

Too many companies don't want to borrow. Smart smaller businesses would avoid borrowing if at all possible. Get it going in your bedroom, get friend to lend you a garage for workshop, squeeze out a deal with a commercial landlord for renting... without being weighed down by extra debt.

The banks will already have sectors they're very wary of lending to, and they shouldn't be guilt-tripped into lending to basket case businesses which have little prospect of survival or success.



I can only hope she made up the tale in order to get her business promoted in the paper. Yet it says she bought, and not in her preferred location in Bournemouth.

I'm not ruling out the possibility she could grow a business like this, but on a tight budget for a small business, I'd do it very differently than borrowing heavily having a shop in Bournemouth. Investment in website, and especially in building business contacts, through networking and promotion. All 3 staff would be able to work from their own homes, and any necessary meeting could be done with the client at their workplace, hire conference room for 2 hours, translation jobs emailed to staff to complete at their own homes. ect. Until ready to expand properly with less reliance on the banks. Imo.

Bostico International (Street View exact link)... seems to be plenty of offices and shops on that street up for sale and to let.

Bangerchick

dopester wrote: »

Bostico International (Street View exact link)... seems to be plenty of offices and shops on that street up for sale and to let.

I am hoping that the picture is subject to a small quirk of Google StreetView splicing the images together, and the firm's logo isn't actually "We don't just tranlate, we communicate", otherwise it is no wonder she couldn't get a loan :rotfl: