Banks 'must hand over the cash'

Although unscrupulous lending was the principal cause of the current economic crisis, it is vital that banks open up their purses again and start lending, one expert warns.

Sydney Morning Herald money guru David Koch has warned that unless more cheap credit cards and personal loans are approved, the economic crisis is going to deepen further.

“My view is that Australian banks are getting a free ride and not reciprocating the generosity of their government assistance with more realistic lending practices,” Mr Koch exclaims.

He called on the banks to follow the lead of the Reserve Bank and introduce more low-interest personal loans, credit cards and home loans and make them more accessible to average Aussies.

This, he says, is the least that banks in Australia and across the world should do in return for the billions of dollars that taxpayers are paying to prop financial institutions up.

Following the rate cut flurry at the end of last year, the number of home loan approvals witnessed during December soared, suggesting that many people are still keen to borrow.

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