Credit and economic policy

Quarterly Bulletin 1994 Q2
Published on 01 June 1994

In a speech at the Institute of Credit Management National Conference, the Deputy Governor considered the influence of policy on the lending process. He mentioned two particular influences: the institutional and legal framework, which serves to underpin the business of lending; and the macroeconomic climate in which decisions are made. Referring to the 1980s, he pointed to the value of financial liberalisation, which had led to more flexibility, diversity and competition. However, he stressed the link between the monetary laxity in 1986–88 and the inflation and recession that followed. That experience underlines the need for monetary restraint, to create the conditions for sustainable economic growth. In such a climate, lenders could lend with greater certainty, concentrating on the merits of each individual proposition without fear that it will be overridden by further ‘boom and bust’.

PDFCredit and economic policy

Other Quarterly Bulletin 1994 Q2 articles

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