George Osborne unveiled a £140 billion emergency scheme to try to avoid a second credit crunch caused by the ongoing chaos in the eurozone
The Bank of England is to offer money to high-street banks to kick-start mortgage and small business lending to prevent loans being rationed for many families and entrepreneurs, the Chancellor announced.
It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis.
Sir Mervyn King, the Bank of England Governor, said that the “industrialised world has thrown everything bar the kitchen sink” at the global economic meltdown but that even “bolder action” was now required.
Questions
Answer with complete sentences.
- What did George Osborne announce?
- Why is he doing it?
- For what purpose is the Bank of England offering money to high street banks?
- Why has the cost of mortgages risen recently?
- Who is the Governor of the Bank of England?
- Does he believe that more or less action is required by governments?
General
- Banks do not want to lend money – in case it is not repaid. Should governments encourage them to lend money in this situation?
Answers
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I think the governments should encourage banks to lend more money to small businesses. It would be of great help for small businesses to survive and grow, and consequently the economy to grow; as the economy growth, wealth would be brought back to the banks. It would also reduce unemployment and therefore be helpful to the families. For these reasons, I believe that the small businesses, the communities and the banks all would benefit from the banks’ generous lending.
Why don’t banks want to lend to small businesses? Because they are worried that they will lose money. When they lost money before (on lending on property etc) everyone got angry – now the banks are cautious and suddenly people want them to lend. Strange world!
Hi Paul
Would you mind to suggest synonyms to “take or taken”? Thank you.
I think it is very important to find ways that can prevent the deprivation of country’s finances. Everybody, who lends money, has to be aware that it can be a relatively risky business and time to times the loss cannot be avoided. The current financial climate is full of uncertainty and banks unwillingness to lend money is understandable. The introduction of emergency scheme might be very encouraging to many people who straggled with their everyday expenditure as a result of unemployment or being low – paid. From my point of view, government should help the high street banks to lend money even in this difficult situation. However, cautious measures should be taken and interests of all parties must be taken in account.
It depends on the context – but I would usually use the basic word! About your main paragraph the language is good – but I’ve no idea what you mean?? What should they do? It isn’t clear to me.