Belfast Telegraph

Banks offer ray of hope on a day of frustration

By David Elliot

In times of crisis you have to look for the upside. In this particular crisis, the optimistic among us who don't work in the public sector - or do, but chose not to strike - were hoping for an easy commute into work as the strikers either stayed at home or waited a while before heading for the picket line.

A couple of minutes shaved off a journey to work isn't what you'd call a tonic for the soul but in dark economic times, you have to take the positives where you can get them.

It turns out that a dearth of public transport meant the traffic was as heavy as ever and there was plenty of time to listen to the Chancellor on the radio describing how he recognised that the UK economy is struggling and he and his cohorts are going to do everything in their power to give us all a kick-start.

Good idea George, but it's slightly ironic that a public servant was trying to boost the private sector on a day when his cohorts were probably on strike.

Those who chose to strike yesterday have their own reasons for taking to the picket line and in many cases - particularly for doctors, nurses, social workers and teachers - will be well supported right across the community.

None of us would deny these essential workers the right to a good pay packet. We might argue a bit about the unsustainable pension package they've become accustomed to but nobody would begrudge a decent salary to what are arguably the most important people in society.

But such a broad all-in strike also bundles in those in other areas of the public sector where more workers with more mobile skills operate, such as those in the civil service, and where private sector workers can draw a direct comparison when it comes to salary, pension and other benefits.

It's here there's a little less sympathy, particularly when you consider the public sector pensions timebomb discussed on these pages and alluded to in this column recently.

It's certainly hit Northern Ireland businesses hard at a time when they could really do without it.

Some have managed to make it work in their favour - taxi drivers for instance - but others have been frustrated by everything from border delays, airport holdups, closed schools and lack of the aforementioned public transport.

But it was still strange that George Osborne chose to focus on helping the economy yesterday morning when the strike was literally happening around him.

As the day progressed, it turns out he must have had an inkling about an announcement from the the world's biggest central banks that saw stock markets around the world rally like it was 2006 all over again.

In what amounts to a banking supergroup - think Mick Jagger, John Squire, Dave Grohl and Jack White, but with a lot less charisma - the Bank of England joined forces with the Federal reserve, the Bank of Japan, the European Central Bank, the Bank of Canada and the Swiss National Bank.

They jointly announced they would work together to boost liquidity in the global economy and keep the wheels of commerce turning.

Worried that banks would stop lending to each other, a situation which would eventually mean they'd stop lending to you and me, they're cutting the price of emergency dollar loans to cash-strapped banks by 0.5% until 2013.

They're also making it easier to lend money of any denomination between themselves in an effort to try and stave off a new banking crisis at the first sign.

This, coupled with news that the number of people in work in the US rose sharply in November, sent markets into orbit with both the FTSE 100 and the DJIA up over 3% at the time of writing.

So you see, George wasn't being so slow on the radio, although there is unlikely to have been much support for the bank's move from the picket lines.

And it remains to be seen how such a bold move will be received once the dust of today's rally has settled.

If you remember, banks lending too freely got us into this mess in the first place.

Is it wise for the banks' banks to untie the purse strings?

Most definitely given the dire straights we find ourselves in.

The art they need to perfect right now however is moderation.

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