Loan risks
Sir: I hope I may be forgiven for returning to the subject of bank lending overseas, so amusingly dealt with by your correspon- dent Christopher Fildes (City and sub- urban, 25 February). Among various ex- planations advanced for the vast sums lent to unsound borrowers overseas is that the banks have so much money coming in, they don't know where to lend it. While leaving this subject to your correspondent to deal with, it seems to me to contrast sharply with the case reported recently in the Times of the hapless entrepreneur in Corn- wall, seeking an advance of £25,000 on his modest overdraft in order to finance an export order for motor cars and to keep 17 men employed, who was turned down by the National Westminster Bank, with the admonishment from an official at head
office that he should first inject some equity before borrowing more or he might become 'overstretched' (Brazil, please note).
How far we have moved from the days of the Victorian banker who would have visited the works (unlike the manager of the St Ives branch), assessed the man and the business, and if he liked both, would have advanced the money — probably with less risk and greater profitability.
Is this, perhaps, a small-scale example of the City-Industry Divide, which we are constantly told does not exist?
Norman Pearson
Copt Heath, Cold Ash, Newbury, Berkshire
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