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Darling losing his patience for acting as a buffer between the banks and the public.

July 31st, 2009 by tom | 0 Comments | Filed in Daily News, Money Management, Recession, UK Banks

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It can be no coincidence that a company such as Tesco, who has such a strong feel of the street, is pulling out all the stops to get into high street banking. The reason has to be that in no time in history has there been so little trust between the public, the business community and the banks.

And the great irony is that the UK publics are now the largest shareholders in the banks that they seem very reluctant to do business with. And vice versa. Seemingly the outwardly placid Alistair Darling’s read the riot act on Sunday with leaders of the UK banking community, at a specially convened meeting held at 11 Downing Street, with his main contention being that the banks continue to suppress the growth or re-birth of UK business by refusing to free credit at the levels required to kick start the economy

The sad fact is that for many years the UK government and UK financial sector have worked hand-in-hand to fund government projects and increase economic activity within the UK. However, since the worldwide recession, the reputation of the traditional UK banking sector has become so tarnished and a barrier of distrust has been built that it seems impossible to break down. public any number one and the distance between the government and the sector has never been greater.

As banking leaders left the meeting they were apparently under a much stronger impression that action has to be taken, and in the short term. However, it still remains to be seen whether the UK banking leaders will actually fall in line

What does remain certain however is that in spite of the tens of billions of pounds spent on rescuing banks, companies are still struggling to gain access to finance and the UK government programme that injected £125 billion of the public’s money into the economy has so far produced results that can please nobody..