Nationalising RBS 'no silver bullet' says EEF
Commenting on new reports that the Government is considering nationalising RBS to help increase bank lending, the manufacturing bosses' organisation EEF has warned that such a move would not be a "silver bullet" solution for the sector's SMEs.
EEF chief economist Lee Hopley said the debate around banking reform had to address the key problem affecting the economy – the difficulty SMEs were having in accessing finance.
She continued: "There are a range of possible options to solving this problem, including the creation of a state-backed bank, but this would carry considerable cost and risk for the taxpayer. This should be squared off against other possible interventions, including increasing bank competition, increasing securitisation of SME loans, and more vigorously promoting existing government schemes such as Funding for Lending, which has only just been launched.
"There is no silver bullet solution to getting the flow of finance moving to SMEs – and we should be wary of jumping to a 'big bang' solution without being clear on what we are trying to achieve."
