The government has launched its latest attempt to try andget the banks lending again to small businesses.
By offering insurance that the banks can take out againstpotential bad debts the government in turn will make the lenders commit to legallybinding agreements to lend more money.
Trying to get lending restores to 2007 levels has been aconstant aim of the Chancellor Alistair Darling for the past few months and heagain did the round of radio stations and TV shows this morning to assuresceptics that this latest scheme would work.
It follows on less than a week from the unveiling of a £20bnloan scheme by Secretary of State for Business, Enterprise & Regulatory Reform Lord Mandelson that was designed to help SMEsget credit.
In a statement outlining the asset protection scheme theTreasury indicated that there were plans to widen the initiative to somethingof a more global nature.
“The Government will be taking forward discussions in thecoming weeks with its international partners about the establishment andco-ordination of such schemes by a number of countries. This documentsummarises the headline terms of how a UK scheme would be implemented,” saidan H.M. Treasury statement.
Critics have attacked the increasing burden on the tax payerwith some describing the asset protection scheme as the last throw of the diceas the government tried to get credit flowing again.