Fisking Peston

How to explain the King-Osborne plan to pump more cheap credit into the economy? Robert Peston gave his explanation of last week’s Mansion House speech. Here, our occasional media correspondent, The Skimmer, gives his thoughts on Peston’s thoughts:

Peston: The Bank is saying that, in a business-as-usual way, with no stigma attached and at a cheaper interest rate, it will provide the funds that till now it would only provide through its so-called discount window – which is where banks go to borrow in an embarrassing emergency.

The Skimmer: Every other central bank in the world has been doing this as part of normal operations for five years now – this is part of the core function of a central bank.

Peston: Funnily enough, earlier this week when I interviewed Hector Sants, the outgoing chief executive of the Financial Services Authority, he said the banks were indeed sitting on more cash than they need to do, rather than lending it, because of their fear of impending crisis.