British banks increased willingness to take risks when it comes to lending sets the health of the economy at danger.according to the Bank of England’s twice-yearly report, the banks growing hunger for risk-loans is beginning to threaten the whole countries economy stability. The report also tells us that the stock wobbles that have been felt twice had no impact on the banks behaviour.
Quoting from the report:
“Anchored expectations of macroeconomic stability and competitive pressures in the financial sector appear to have encouraged a further increase in risk-taking,”
John Gieve, the deupty governor of the Bank, claimed that the financial markets have continued to be vibrant and core institutions are highli profitable. The economic outlook have been to favourable.
“But risk-taking is increasing, including through higher leverage, lower margin requirements and relaxation of covenants,” he added.
Lending is have already reached the limit in the UK, with consumer borrowing thought to be in the region of £1.3 trillion.