I think that the Banks have learnt a valuable lesson in the last Banking crisis; that imprudent lending does not pay. The banks lent to Companies and individuals almost on demand. Granting loans for property development as if property always goes up. They gave mortgages to a multiple of several times applicants' income, and to a value greater than that of the home they sought to buy.
The credit crunch is some two years behind us and the danger is that the banks are too cautious. Banks need to be less exploitative with would-be borrowers. Of cause lending must be to creditworthy individuals and businesses, it must be prudent and it must not expose borrowers to unsustainable levels of debt. At one time, this would have been self-evident.
There is a different kind of pressure on the banks now to offer loans to more small businesses and individuals including first-time home buyers, otherwise what are banks for?
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