Peace terms
BOTH sides need to end this state of war on the nursery floor. The banks no longer have to defend themselves against the charge of profiteering. On the contrary; if their business were more profitable and their margins more reassuring, they would be readier to take a chance and lend which is what the Chancellor wants them to do. They are, though, right in saying (what City and Suburban has been saying with the regularity of a cuckoo-clock) that for many of their present customers, debt is not the treatment but the trouble. These businesses have too much borrowed money and too little money of their own. How, though, are they to put that right? Big companies can raise capital in the stock market, and have been raising it, hand over fist. Where can small companies raise it? Not from us, say the banks — we are not in the same game of punting our depositors' money as someone else's risk capital. We've borrowed it, we'll lend it, that's banking. True enough, but not good enough. They and the Chancellor should together be asking how to get private capital flowing to small businesses. That may need new services from the banks, and will certainly need reform of our taxes on savings — which now set money flowing downhill into big institutions. None of this can start until the war game stops. We can already see who stands to lose it.
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