Businesses 'lack trust' in banks

 
Canary Wharf The BCC said financial institutions needed to rebuild trust

Businesses' trust in banks and other financial institutions is falling, according to a survey from the British Chambers of Commerce (BCC).

Half of the 1,560 businesses questioned said they mistrust banks and building societies, while 38% said they trust them less than a year ago.

Banks and building societies remain the main source of finance for firms.

Meanwhile, a separate survey revealed businesses' hiring intentions fell to a 28-month low in September.

But the report from accountants BDO also said that business optimism showed a rebound this month, "continuing the zigzag pattern of ups and downs in confidence of the last four years".

'Repair relationships'

The BCC survey said 57% of firms felt confident they could secure external finance, while 37% said they were not confident of doing so.

Some 59% of those polled said a government-backed business bank would make them more confident about accessing finance.

But when asked about government-backed finance schemes, 43% of firms had not heard of any, with younger businesses and micro firms most likely to be unaware of them.

"Financial institutions need to rebuild trust and repair damaged relationships with businesses and improve transparency," said John Longworth, the BCC's director general.

"Regulators should look to increase competition in the banking sector to ensure businesses have more choice, and the government must ensure that plans to create a British Business Bank mean more funds available to growing businesses."

 

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  • rate this
    +1

    Comment number 171.

    Jason in Essex "Much of what they did was borderline illegal."

    What Lehmans were doing WAS illegal. What Bear Sterns were doing WAS illegal. Ditto manipulation of LIBOR.

    Fools came on this board five years ago and trotted out rubbish about market sentiment and how enormously clever they were and - shut up, proles.

    Its worn very thin. Still no recovery or payback. Or jail

  • rate this
    0

    Comment number 170.

    Corruption is rife in this country. Bring back citizen smith. At least he had a plan to right the wrongs in this country. Up the TPF!

  • rate this
    +2

    Comment number 169.

    An employee of a non-money warehouse eg. an art auctioneer or grain handler, who temporarily “borrows” stored valuables without the depositor’s knowledge, uses them to contract with 3'rd parties & attempts to return them before anyone is the wiser is an embezzler, subject to imprisonment. Bankers engaging in FRB enjoy a fundamentally different legal position thanks to Govt's laws.

  • rate this
    +1

    Comment number 168.

    So, are we clear that if our taxes and QE stops - banks will cease to exist and stop lending our bail out money back to us and our government?

    Yep, sorry about the above, I stepped off the world for a moment and fell into an abyss. Oh, no I didn't because our taxes - direct and indirect keep bankers bowels moving. You know, that stream of bankers incontinence that we are sinking under.

  • rate this
    +3

    Comment number 167.

    Of course business's don't trust the banks, they are the very reason we are in this mess in the first place! Thousands of business's living up to their credit limits have crashed, all those years hard work for NOTHING! The government are to blame for everything, DO NOT expect anything less while we 'let' this go on, we have all been made irrelevant by our lack of action.

  • rate this
    +1

    Comment number 166.

    #153.Big Zakk

    "Instead of pouring taxpayers cash to the banks, why did George not give each household £250K to spend as they liked. Clear the mortgage, debt, buy a house, car etc. Everyone wins. [...] House market stabilises,"

    Give everyone £250k, watch house prices shoot up £250k.

  • rate this
    +1

    Comment number 165.

    @152 Trout
    I think you mean except only you know.
    Where do the advances come in medicine? Mostly for profit enterprise: eg. J Craig Venter did what in 1 year what took Govt 10 years.
    This 1 amazing mile stone, of countless, puts pay to your socialist drivel. Tell me, how far did you USSR go? Where is your North Korea now? In the toilet. Why? They suffocate free competition & innovation.

  • rate this
    0

    Comment number 164.

    JPublic said 'Is it not a crime at the moment to cause mass economic damage and consequential social hardship. Its only 'frowned upon' at worst.'

    I agree. Make it criminal for anybody to cause social hardship. First behind bars to be Blair, Brown, King and Osborne. Followed by all Greeks and the weathermen responsible for the rainfall spoiling US crops and pushing up world food prices.

  • rate this
    0

    Comment number 163.

    Its also about presenting a convincing case to the bank to gain investment. If those looking for loans are like the 80% of business owners on Dragons Den then I am quite frankly happy that banks are not lending to them.

    There needs to be a reasonable expectation of the money being returned though means other than repossessions.

  • rate this
    +1

    Comment number 162.

    @155.Jason
    I don't think this is contradictory:
    1. In a Free market banks that partake in FRB would be viewed as riskier & therefore less safe & attractive than the banks that are seen as safer & more prudent over the longer term.
    2. It's the Govt's responsibility to protect contacts & to prosecute & protect against fraud. FRB is fraud, state sanctioned fraud in the current system.

  • rate this
    0

    Comment number 161.

    Isn't asking businesses a very simple 'do you trust banks' a bit trivial? Trust them to do what?

    I trust my bank to keep my cash deposits secure and charge me the agreed rate of interest on any borrowings. I trust the ATM network to work 99% of the time, and I trust them to process my transactions accurately.

    I trust them less to manage investments and sell me products that are right for me.

  • rate this
    0

    Comment number 160.

    153.Big Zakk
    But the banks own all the mortgages. I suppose the government/BoE could go to the untrustworthy, rip off banks and ask to buy all the mortgages and cancel them. And the banks will wrap up all these mortgages into a product called CDOs and sell them to the BoE.Of course no-one will charge out and get a mortgage immediately and the banks won't lend cash to anybody to make a quick buck

  • rate this
    0

    Comment number 159.

    The banks couldn't care less if you trust them or not. The fact is, that there are very few places you can go if you want to lend money

  • rate this
    +1

    Comment number 158.

    @147.JasonEssex
    142.Little_Old_Me
    "Nationwide is still a Building Society, still some of the other small ones exist as well."

    But there are not many Building Societies around and those that are offer derisery interest on your savings on par with Banks. Not like days before Building Societes became Banks where savings interest was notibly higher than Banks and higher than inflation.

  • rate this
    0

    Comment number 157.

    Businesses want to grow so they need loans, which cant be provided by the government so they have no choice but the banks. If i were a business that wants to expand its best to be friends with the banks if you dont have wealthy backers. Stop the bank bashing cos politicians will come n go but the banks will remain. Politicians enabled the mess the banks got into as the sort relection remember

  • rate this
    0

    Comment number 156.

    A Laissez-faire market would let Banks succeed or bankrupt on their merits.Just like an airline, restaraunt, law firm, any business at all, in the free market there is no bailout, no rescue package for a fraudulently run business. Only Westminster gives such protection to poorly run Banks. They take your £s to keep the Large Bad Banks alive. In Laissez-faire they wouldn't exist!

  • rate this
    0

    Comment number 155.

    150.Bastiat
    Your contradicting yourself. First you say the banking system should be left as a free market with no government intervention then your saying FRB should be scrapped. FRB is part of the free market principal. The only one who could scrap it would be the government/FSA which is intervention. So in fact you don't want a free market.

  • rate this
    0

    Comment number 154.

    As an SME who has seen all of the banks tactics first hand the government need to do more. When the banks got into trouble they changed their lending criteria and are now trying every trick in the book to off load these companies that do not fit the new criteria many of us are suffering heavy 'management' fees increased interest rates and reduced facilities even though we trade well who will Help?

  • rate this
    0

    Comment number 153.

    Instead of pouring taxpayers cash to the banks, why did George not give each household £250K to spend as they liked. Clear the mortgage, debt, buy a house, car etc. Everyone wins. A secured home, a deposit, reduced personal debt etc. Money flows into the economy, House market stabilises, the car and retail sectors fluid.Once spent or saved, the money all ends up back in the banks anyway,

  • rate this
    +1

    Comment number 152.

    "Bastiat
    in favour of an environment that promotes strong & fit competition & free of Govt favours: the Free Market"

    Except we know that such a market did not deliver public health improvements (eg sewers and clean water), education for all and the massive social progress of the past 150 years. We'll never know whether it would have done and there are no proof points to say it would or could.

 

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