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Credit Easing

The chancellor has announced that the Treasury will buy company debt, both to prevent a serious credit crunch if the eurozone melts down and to improve credit conditions for small businesses in the longer term.
http://www.bbc.co.uk/news/business-15148638

So it seems that we are to get "credit easing" instead of/as well as QE this time round.

It seems HM government (or the UK taxpayer) is now prepared to venture into making loans to businesses either when the banks won't oblige, or on favourable terms compared to the banks.

Is this a much needed boost to stimulate growth in UK business, or another example of the economics of the madhouse?
"When the people fear the government there is tyranny, when the government fears the people there is liberty." - Thomas Jefferson

Comments

  • Blacklight
    Blacklight Posts: 1,565 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Time to start up as a landlord I reckon. Free loans, cheap mortgages and house prices falling for 15 months in a row, it's a no-brainer.
  • Conrad
    Conrad Posts: 33,137 Forumite
    10,000 Posts Combo Breaker

    Is this a much needed boost to stimulate growth in UK business, or another example of the economics of the madhouse?


    Banks aren't lending to business so it looks like a sensible alternative to me.

    A sound business wanting to invest in new equipment to underscore the business' position going forward for example.
  • pqrdef
    pqrdef Posts: 4,552 Forumite
    So what is the Treasury planning to use for money to buy up these bonds with?
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    well we know you can't borrow to get out of a debt crisis so I suppose we will just have to print some more money
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Seems as if the Treasury is preparing for Eurozone bank meltdown.
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