Bank lending: Turning on the lending spigot

The deleveraging process is threatening to create the economic equivalent of a motorway pile-up. As banks slam on the lending brakes, companies and consumers are slamming on the brakes too – crashing into one another. It is vital to get the banks lending again – as the authorities on both side of the Atlantic are recognising. Mervyn King, governor of the Bank of England, rightly said on Tuesday that reviving the flow of credit was policy makers’ “single most pressing challenge” – arguing that m...