Banks must walk the talk on lending

Gemma Harle is managing director of TenetLime

The New Year has heralded the entry of the Prime Minister into the lending fray. His voice is a welcome addition to the growing cry that the "risk" pendulum has swung too far the other way. The subtext here is that when politicians make remarks of this nature they are acknowledging that banks need to recognise their responsibilities to UK plc as well as to themselves.

If banks fail to have a social purpose as well as an economic one then what are they for? Arguably of course shareholders have never been top of the list of priorities for banks or they might not have got into the pickle they are now in.

Rebuilding trust with all sections of society from politicians, to voters, businesses and customers is a necessary and long journey they are going to have to make.  Banks are keen to tell us they are engaging in "helpful banking" and are there "for the journey" but upon inspection they are not putting their money where their collective mouth is. Until they walk the talk in terms of lending to homeowners and small businesses alike their words will stick in the throat.

That Grant Shapps is meeting Hector Sants of the FSA is helpful if the minister knows what he wants to get out of it. We do not need another fact finding mission. If a lighter regulatory approach is necessary to achieve the goal so be it. It need not herald a return to ill conceived bonus schemes and irresponsible lending.

The New Year has started with a positive step from our PM. He needs to make sure his words are not empty too. Happy New Year.