Banks Must Lend To Businesses Before Paying Bonus
Banks at U.K were warned last night for not lending money to small business.Banks were usually paying out that money in the form of big bonuses to their staff and large dividends to shareholders.
George Osborne said the government “would not tolerate banks piling the pressure” onto small firms, and that it was their “obligation” to lift lending.These comments have came right before the bank’s are going to report their fundamentals.Lloyds and RBS are banned from paying dividends by the EU because of the combined £75bn of taxpayer funds they have received.
In an interview with the Sunday Telegraph, Mr Osborne said the government “will not tolerate banks piling the pressure” on small firms struggling for credit.
“Every small and medium-sized company that I have visited in recent weeks has had some problem with their bank – either they have found it difficult to renew their overdraft or they demanded additional collateral, often someone’s house,” he said.
“The danger is that, particularly next year, when there is a huge amount of refinancing required, that the small and medium-sized businesses suffer from a lack of access to working capital.”