Financial Times FT.com

Beware of promising too much on lending

By Krishna Guha

Published: February 2 2009 17:55 | Last updated: February 2 2009 17:55

As the Obama administration prepares to unveil its plan to fix the banking sector and restore the flow of credit to the economy, it should be careful about how it defines success.

The political shorthand is typically to say that the goal is to get the banks lending again. That conveys the message that the purpose of spending public money on the banks is not to help bankers or bank shareholders but to aid the wider economy.

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