Lending backlash feared
PA Wellington An “overly-con-servative backlash” against borrowers could come from banks hard-hit by the sharemarket crash, a Price Waterhouse partner, Bruce McCallum, says. Bank managers were looking for a large measure of comfort before making loans, Mr McCallum said. “There is now a real risk of an overly conservative backlash, and if the shutters come down completely, it will cause a further restriction of economic activity.”
He said it was vital for well-managed and potentially profitable companies to trade their way through the downturn.
“If they can’t, the alternative will be more company insolvencies, further loss of general business confidence and more job losses.” Trading a company out of insolvency was now virtually impossible, he said. The accounting firm has set up a corporate recovery unit designed to solve problems before they get out of hand, he said.
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Press, 4 April 1989, Page 37
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141Lending backlash feared Press, 4 April 1989, Page 37
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