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|"Funding for Lending Scheme has been disastrous for savers" - Kevin Caley, Founder of ThinCats|
|Thursday, 02 June 2016|
Responding to the Bank of England’s latest Funding for Lending figures, which show that the scheme has failed to significantly boost lending in the last year, Kevin Caley, Founder and Chairman of ThinCats, said: “Today’s Funding for Lending figures may show a fractional increase in lending since last year, but the scheme has had disastrous side-effects for UK savers. By creating a system whereby the Bank of England effectively subsidises bank lending, it has reduced the cost of capital, giving banks little need to attract deposits from savers. All of this pushes down saving rates, which have been stuck at the lowest levels in living memory for over six years.
“At best, the scheme is an ill-conceived attempt to mask the fact that banks are simply not lending enough. At worst, it’s a deliberate tax on savers, who will continue to pay for the financial crisis until well after the scheme rightfully winds down in 2018. Peer-to-peer lending has emerged as a genuine free-market alternative to this type of intervention, producing investment income four or five times greater than bank deposits, while simultaneously providing business loans to fill the funding gap left by the banks. The very high interest levels available with peer-to-peer lending is a clear demonstration that the banks are still not meeting the demand for business funding.”
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