Are all the incentives good enough?

Could this be a short, sharp recession? If the main problem was only the economy, it probably might be.

In 1992 the government ended of the last recession which saw a record number of people being repossessed, the government took measures and they are implementing those measures again today, but the government realise that there is a difference. The difference in the financial credit crunch is simply because the banks are concerned about lending to one another.

There are a lot of banks that have, what is known as ‘toxic debt’ i.e. people who are in mortgage arrears and who are being repossessed. Until these amounts have been finalised and announced in their accounts, banks will continue to concerned. This is a big problem because banks need that relationship between each other, I believe that the credit crunch didn’t cause the recession and neither did the recession cause the credit crunch, but they certainly didn’t help one another. Collectively the combined damage and impact won’t help us to a speedy recovery, corporate companies and the general public all require credit, it helps us all too instantly progress.

Low interest rates, at the moment, don’t appear to be helping people and companies because it is still difficult to lend money. I also believe the government has done, and is continuing to do as much as they can, to support and help the banks to get back into a position of having strong relationships with one another, but this doesn’t help the people who are being repossessed.