Bank Lending- Good news or Bad news?

Some upbeat news from Barclays today about its strong start to the year, and shares on the London Stock Exchange move up nicely.
Some say that until confidence is restored in our banking system, there will be no escape from the economic downturn that is gripping the nation, and I subscribe to this view too. So, the news from the Forum of Private Business today saying that small businesses are still seeing a deterioration in the bank lending environment ( i.e. delays in banks responding to loan requests….service charge hikes….loan rejections etc) leaves me in two minds. If the banks hang tough while small businesses suffer in the short term, many people will be out of a job as a result, and liquidations on the Graydon database will rise.On the other hand, if the banks start to reveal much stronger financial results due to their hard headed tactics, the positives emanating from the news might help pick up the general economy faster. Hmm, there’s a conundrum.

Related reading