LA has spoken over the last few weeks to cabinet members and very senior civil servants about the credit crunch. He has spelt out why the bank bail out would not benefit small and medium business, they have failed to take note and still do not understand why SMEs are finding finance tough and are frankly too worried to invest. SMEs are concerned that the banks will not renew long standing lines of finance, and with good reason. This uncertainty leads business to suspend investment plans, reduce spending and hence slow the economy.
LA does not like legislation as a rule, but the banks need it. Emergency legislation needs to be brought forward that says a bank can only remove an existing line of credit on a business if it can show a fundamental change in the position of the business since it's last review. The banks would also not be able to ask for directors guarantees on the same basis. Such a bill with a 2 year sunset clause would add a considerable element of confidence.
LA also wonders why the opposition are not putting forward such suggestions?
LA
Guilt and Shame
8 hours ago
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