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Banks warned: lend cautiously
Banks warned: lend cautiously
Last Modified: 13 Sep 2007
By:
Faisal Islam
The Chancellor has accused banks of lending money too freely, and has told them to take a more cautious approach.
In an interview with the Daily Telegraph newspaper, Alistair Darling said:
"In crude terms they need to know who they're lending to, how much they're lending and what the risk is. Now, that's elementary banking, one might think, but there are times when going back to good old-fashioned banking may not be a bad idea."
Alistair Darling's warning comes at a time when house prices are falling for first time since October 2005 and the American sub-prime lending market has destabilised global markets.
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After the collapse of the US sub-prime mortgage market, the global economy is in the throes of a credit crunch.
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