The government has announced a second rescue package this week, which amounts to lending the banks around £200 billion, but following the first rescue package last year, the question on many people’s lips is ‘will it make a difference?’

For instance, last year the Royal Bank of Scotland (RBS) absorbed around £20 billion of taxpayers cash, however, their mortgagors did not see it.  The banks argue that they needed the money and had to use it to protect their balance sheet, so what has changed?

According to a spokesperson for Moneyfacts:

“In recent months, lenders have been quick to point out that the increased margins are a result of the increased risk they have faced. Now that the Government has stepped in to reduce that risk, borrowers will be hoping that not only will banks start to lend again, but that the reduced risk is passed on with lower rates.”

Let’s hope the banks realise they need to get money circulating again properly.

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