Custom and practice
'OH, good,' said the bank chairman. 'I've got lots of customers they can have.' The build- ing societies, I had told him, were eager to spread their wings and lend to small busi- nesses. Those that tried it soon withdrew, minus feathers. Now the Treasury and its all- purpose adviser, Don Cruickshank, have come up with a splendid new way of making banks part with their customers. They must be made, so he says, to give credit references for small businesses, so that other banks will feel free to take them on. It is hard to imag- ine a problem to which this could be the solution. Banks have always given credit ref- erences, on a descending scale, from 'Good for all their engagements' to good for not much. At the top of the scale, the borrower's credit can speak for itself, and at the bottom end, he would rather that his bank kept quiet. What the Treasury and Mr Cruick- shank have noticed is that big companies and private customers can pick and choose their banks from dozens, but the same old High Street names still dominate the market for small businesses. That may be because for years on end they found it unrewarding, but, if it is now worth having, competition will open it up. Already the Abbey National has spread its wings.
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