Root cause of lending crisis is uncertainty over debt liabilities - Thurso
January 14, 2009 12:00 AM
John Thurso, Liberal Democrat Shadow Secretary of State for Business, Enterprise and Regulatory Reform, responded to a parliamentary statement by the Government announcing details of their business support measures.
Viscount Thurso said the Government's proposals failed to address the "uncertainty about the level of toxic debt in the banking system" and expressed concern that "large liabilities will continue to be taken on by the taxpayer without proper quantification or clear strategic thinking."
Responding to the Government's plans for a loan guarantee scheme, Liberal Democrat Shadow Business Secretary, John Thurso said: "While I welcome the sentiment of today's announcement, I have grave doubts about the practicalities of this scheme."
"The lack of credit is largely due to the uncertainty surrounding toxic debt in the financial system. It's as if there is gangrene in the financial body and just like gangrene it must be amputated. This means the creation of a bad bank for all the toxic debt.
"The scheme could end up putting even more taxpayers' money at risk. How do we know any of this money will go to firms that wouldn't have received it anyway?
"The announcement of investment in small companies is broadly welcome, as affordable capital is the biggest barrier to the growth of small companies. However, as always, the devil is in the detail. Ministers must make clear what rate of return they will expect for their investment."
What would you like to do next?
-
Subscribe for updates
Follow the party's activity on...
- Twitter:
- Liberal Democrats
- Facebook:
- Liberal Democrats
- YouTube:
- Liberal Democrats