HAVE the major banks not learned anything from their practices which exacerbated the financial crash? It is a perennial question that many will be asking after yet another report exposed the sharp practices still undertaken by some lenders.
This is highlighted by the Institute for Turnaround which has revealed the extent to which the viability of small businesses is being compromised by those bankers who appear hell-bent on imposing as many charges as possible, thereby inflating their personal bonus, rather than helping the firms in question to withstand financial pressures or to expand.
This is not a new phenomenon – Batley-born entrepreneur Lawrence Tomlinson’s recent expose of the banking sector concluded that “unscrupulous” business practices pursued by the state-supporting banking industry was “killing off” small businesses.
Yet, as Mr Tomlinson said, high fees and aggressive behaviour are incompatible with good turnaround practice. Quite the opposite. It can put people out of work and prevent people from launching their own venture.
Of course, the banks have a responsibility to lend sensibly – a duty that they neglected prior to the credit crunch. But they need to remember that small firms became the lifeblood of the economy under Margaret Thatcher and that it is this sector which is critical to this Government meeting, and exceeding, its growth targets. If the Treasury cannot exert sufficient control now when taxpayers hold such a large stake in the nationalised banks, just when is it going to be in a position to shape lending practices that are fair?