Banks - Worst May Be Over

According to the Bank of England's newest recruit (David Miles) to the Monetary Policy Committee (MPC), the worst may be over. Hardly a surprising statement coming from... the Bank of England. The one that wants to get lending started. And the interest rolling in. The lifeblood of a lending institution.

David Miles is a City economist and the replacement for David Blanchflower on the committee of nine that sets the interest rate. In a similar upbeat 'talking up' message, Barack Obama and Federal Reserve chairman, Ben Bernanke, are keen to restore confidence in American consumers. As a stark contrast, the IMF found that a combination of the banking crisis and the global nature of the downturn meant the world recession would be "unusually severe and long-lasting". However, the fund believes that the early actions taken by policymakers around the world, and a more favourable economic backdrop, distinguised the current crisis from the Great Depression.

Since October 2008, interest rates have been cut from 5% to 0.5%. And still this level at 23.09.09, so banks continue to enjoy using other's money 'on the cheap'. Paying a paltry low return while charging high rates themselves. VAT has been (temporarily) reduced (17.5% -> 15%) and the Bank of England has announced a £75bn scheme to inject money into the economy.

Banking Panic

Finance ministers from the G20 will gather in Washington for the fund's spring meetings. With resources tripled to $750bn (after an agreement in London) the IMF is expected to play a more important role as guardian of the global economy.