Banks take taxpayer’s money but won’t lend any back out!
Over the past year the UK government has spent billions of pounds bailing out the banking industry following the global credit crunch and the ongoing financial crisis. Banks have run into severe difficulties in terms of their finances, and at one point the banking industry in the UK was said to be on the verge of collapse.
However, the government has intervened and ploughed billions of pounds into the banking industry, bailing out some of the most well known banks in the UK.
So, how has the government managed to find all this money to bail out the banking industry? Well, the money has come from the public purse, which essentially means that it is taxpayers’ money that has been used to get the banks back on their feet after they crumbled, even though their problems were often through their own actions, such as irresponsible lending.
However, whilst taxpayers have had to sit back and watch their hard earned money being ploughed into the banking industry because of the problems the industry has experienced it seems that the banking industry is not prepared to repay the favour for taxpayers who are experiencing problems.
This has been reflected in a recent survey carried out by the National Association of Estate Agents, where figures showed that nearly a quarter of homeowners in the UK could not find a bank that would offer them a new home loan in order to cut the rate of interest that they are paying on their mortgages.
This effectively means that whilst the banks were happy to take money off taxpayers to help them whilst they were struggling financially they are not prepared to lend money to taxpayers who are struggling with their finances, which some industry officials have found to be very hypocritical.
With the base interest rate now far lower than it was just a year ago, many homeowners are keen to refinance and get a lower rate mortgage to cut back on their mortgage repayments. Many of these homeowners are stuck on high interest rate mortgages, and are struggling with the repayments.
However, despite the fact that these are the very people whose money has been used to bail the banks out the banking industry refuses to help many of these taxpayers by lending them the money that they need to keep their heads afloat financially.
Industry officials are also concerned about the effect that the actions of the banking industry will have on the recovery of the housing market, as many think that the failure of the banks to lend money by way of mortgages could mean that the recovery speed of the property market is severely slowed down.
Tags: bail out, Mortgages, high interest rate, move, interest, banks, business, mortgage applicationsOne official said: “We cannot let the banks convince us that shutting up shop when it comes to mortgage lending is a responsible move. The decision to restrict mortgages so severely is rooted in self interest. The Government must do more to put pressure on those banks that are refusing to lend, while highlighting those banks that are easing restrictions to help get the economy moving again.”
What about if the Goverment had given the money to the taxpayer instead of the Banks and protected the savings of the bank customer. What would have been the outcome of an action like this ? We as tax payers would have been able to payoff our cards have more disposble income and be in a better place to recover the economy. Let the secondary banks fall leave the 4 top in place so there is a banking system. The tax payer would have been in a real place to save the econmomy instead of porring money into a unless cavern with little prospect of a return.