The Catch-22 game of lending in this economic environment is starting to get on the nerves of British Treasury Chief Alistair Darling. With the exception of the Russian solution, most global policymakers remain torn between the two worlds they live in: the one where banks are publicly crucified for reckless and deceptive lending; and the one where banks are publicly crucified for raising lending standards and reducing credit lines. As the British economy continues to contract amid rising unemployment, Darling is not amused by a mysterious phenomenon preying on small and medium size loan applicants.
"I am extremely concerned at what the banks are doing for the small- and medium-sized companies," Mr. Darling said on BBC television on Sunday. "What companies are being charged does seem to have gone up relative to what banks are actually having to pay because of the fact that we have very low interest rates."
And with that declaration, the concept of credit risk finally made its way to yet another global financial leader.