Commenting on the announcement of the coalition government’s ‘’Project Merlin’ deal with the UK’s major banks, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:
“This pathetic deal only serves to underline that the banks continue to exert a stranglehold on Government action.
“Project Merlin does nothing about too-big-to-fail and the Government guarantee that amounts to an effective subsidy estimated at around £50bn a year. The deal doesn’t begin to address the various market failures which allow traders and executives to extract other people’s money at the expense of stakeholders in the business. The targets for lending are essentially meaningless and likely to have no positive effect on those growing businesses currently unable to access affordable credit. Indeed, the cost of lending isn’t even mentioned.
“As things stand, the banks will continue to turn large profits and pay mammoth bonuses on the back of the Government guarantee, reduced competition and cheap money. They will use their massive lobbying power to influence Government policy across the board. There will be no effective regulatory or structural reform and we will be forced to count the days till the next systemic crisis hits. Such a crisis appears to be inevitable”.
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