How are debts owed to family members dealt with in divorce proceedings?
The first question for the court to determine is whether the debts are legitimate, and this is a...
On Wednesday the Treasury announced details of Project Merlin, the deal agreed with the four largest banks (HSBC, Lloyds TSB, Barclays and RBS) to make a total of £190bn of credit available to businesses in 2011, of which £76bn is to be made available to SMEs.
So will this make an appreciable difference to the current levels of lending activity? A number of reservations have been expressed:-
- This is a gross, not a net figure. Withdrawal of or failure to renew credit facilities could therefore theoretically cancel this out and result in an overall drop in the net level of lending. There is only a very vague commitment in the Treasury Statement to working towards an increase in the net figure.
- As the credit will be made available on "commercial terms", one suspects that SMEs will continue to complain that the charges and conditions attached to the facilities are prohibitive.
- It seems that any refinancing of existing facilities could count towards the gross lending figure. We have recently had first-hand experience of clients being required to refinance existing debt (on less attractive terms) as a condition precedent to new facilities, even where the new lend is relatively small compared with the existing debt. If this becomes a widespread phenomenon, then the £190bn figure immediately starts to seem less impressive.
Finally, it is unlikely that levels of borrowing and general economic activity will start to increase until banks become confident enough to improve the finance terms, and customers become confident enough to take on further borrowings - Project Merlin seems destined to achieve neither.