Financial Times FT.com

Money struggles to pass through banking pipe

By David Oakley, Ralph Atkins and Gillian Tett

Published: July 21 2009 18:55 | Last updated: July 21 2009 20:46

Central banks have pumped a vast amount of money into the financial system this year – but so far there is little evidence that this liquidity has found its way into the broader economy.

Bank loansWhat is happening could be likened to the pattern that develops when a household drain is partly blocked as the central banks frantically pour money into the financial system, with the commercial banks supposedly acting as a pipe, in an effort to stabilise the economies.

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