Sunday, December 28, 2008

Giving credit where credit is due

"It is unfair and irresponsible of the [British] government to put pressure on the public to spend in order to revive the economy."
--Rt Rev Stephen Lowe, Bishop of Hulme

As the worldwide recession deepens, governments everywhere are pumping taxpayers' money into failing banks to encourage them to keep lending to faltering businesses, while at the same time offering incentives to consumers to spend more in order to revive economic activity - spending the way out of trouble. Here in Hong Kong, there have been suggestions that the government should hand out $1,000 to every citizen to keep the economy ticking over.

Then ATV News a couple of weeks ago highlighted HSBC's chief economist and its local boss both arguing that consumer credit should be curbed, and announcing that the bank will raise interest rates on its credit cards. It is unwise, they tell us, to spend money you don't have.

Sound advice, especially when you don't know how long your job may last, and some of Britain's bishops have taken the UK government to task for not agreeing with it. But HSBC is one of the recipients of British government support to keep credit lines open, so it seems a bit disingenuous of them to be arguing the opposite case in Hong Kong. Not to mention that if the banks had followed their own advice, we wouldn't be in this mess in the first place.

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