Economic think-tank suggests a shake up of FSA policy
The Paris think-tank the Organisation for Economic Co-operation, OECD, in a recent survey, said that restoring the flow of bank lending to businesses and consumers must be a more urgent priority. Outlining what most people in the UK already knew, it said that it was vital in our fight to combat the current recession.
The latest survey said that reviving growth was critical and this was tricky with credit conditions as they are at the moment and that this would have a “substantial negative impact on activity”. The OECD went on to say that radical action was required by the Treasury and Bank of England and that any recovery was dependant on “whether measures to stabilize the financial system are effective”.
The OECD said it expected the recession to end this year, it predicted that GDP will slump by 4.3 per cent it also predicted that the economy will go through a period of stagnation with zero growth, unlike the prediction made by the chancellor Alistair Darling. The report suggested that the government may have to implement more radical measures to unclog lending. It said “Where institutions are unlikely to be viable, even with substantial assistance, other measures might be required to restore the health and stability of the financial system without undue cost to the taxpayer”.
In its conclusion the think-tank called on the Bank of England and the Financial Services Authority to shake up their operations and spend more time and energy on policing banks.
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