Why won’t those wretched banks lend money? That is a question many European and American politicians have asked in recent months.
For as the global economy ails, there is growing anxiety about the seeming failure of banks to support growth. So much so, in fact, that this week my Financial Times colleagues reported that British regulators are now quietly loosening some bank rules to encourage more loans – particularly to small businesses, and other seemingly “worthy” borrowers.
But as the political frustration bubbles, it is instructive to take a look at a presentation about bank behaviour recently made by Phil Coffey, the chief financial officer of Westpac, to Australian regulators and financiers.