Friday 26th of November 2010
Banks are showing no signs of returning to old patterns of unwise lending, it has been claimed.
UK economist at French bank BNP Paribas Alan Clarke said: "I don't think there is any danger of reckless lending over the next couple of years. In fact I think it will be the opposite; that there will be too little."
He suggested this will be because the support provided via the Bank of England's £50 billion Special Liquidity Scheme will end in 2012, which is something lenders will have to adjust to and are doing so by curbing the amount they offer.
The low interest rate is also making banks less likely to lend, he suggested.
Such a situation may make future personal debt problems less frequent, but for many people this will have come too late, having taken on too much borrowing in the past and now needing an individual voluntary arrangement (IVA).
Those asking IVA questions may be interested to learn it can help those with debts of £15,000 or more reduce their monthly outgoings by agreeing to pay a reduced amount to creditors over five years.
The Bank of England's Special Liquidity Scheme was launched in April 2008 in response to the start of the credit crunch.
By Rachel Powell
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs could help Britons achieve a comfortable lifestyle by other means
