In academic and policy circles there is deep mistrust of public sector involvement in credit allocation, much more than in the credit allocation decisions made by commercial banks. This mistrust continues, despite the financial crisis of 2007–08 demonstrating the huge dangers of a deregulated credit market. Whilst, post-crisis, financial regulators have begun to develop policies aimed at reducing lending in certain sectors, calls for proactively directing finance to support desirable sectors of the economy have largely been ignored.

Leave a Reply

Your email address will not be published. Required fields are marked *