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Banks still in no position to lend much more

Given that the Bank of England has been criticised for not shouting loudly enough about the risks of a banking crisis, the gloomy tone of its latest Financial Stability Report (FSR) is perhaps unsurprising. That said, we agree with its message that the banking system is still a long way from “normal” and still think that weak bank lending will hold back the recovery in the wider economy.

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