Politicians and regulators must appeal directly to institutional investors if they are to break the paralysis in the banking sector, the chief executive of Standard Chartered has warned.
Peter Sands, who played a behind-the-scenes role in drawing up the framework for bailing out Britain’s banking industry, said shareholders were encouraging banks to hoard capital at the same time regulators and politicians were trying to restore the flow of credit to the economy.
You can understand the Government's frustration at banks not lending, but are investors being out of order? On the one hand you can see that they don't want to see investee businesses run into difficulties, but on the other are they applying the wrong mindset at the wrong time? Putting pressure on the banks that makes them reluctant to lend will lead to pressure elsewhere in the economy.
Tricky one tho innit?