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ClimateNE & Climate Change Schools Project support the move to a low-carbon, resilient economy and help businesses avoid risk and realise commercial opportunities. Posts by Jen Atkinson, Krista McKinzey and Harriet Thew » IN this post-apocalyptic era following the Great Financial Crash of 2008, bank-bashing has become a favourite pastime.
For months, companies and lobby groups have slammed major high street banks for their reticence to release the purse strings to businesses.
Now the Chancellor has waded into the debate, blasting banks for keeping the lending tap turned off and prolonging companies' struggle against recession.
But the banks are both unwilling and unable to respond to Mr Darling's fatally flawed challenge.
Remember, this is the same man who ordered banks to rein in risk and repair their battered balance sheets.
He cannot have it both ways.
If bank chiefs throw money at anything other than perceived low-risk cases they will be accused of financial incompetence and recklessness.
Taxpayers, who own significant stakes in Royal Bank of Scotland, Lloyds and Northern Rock, will be up in arms if they see their hard-earned cash diverted to businesses that default on repayments.
Bank chiefs argue that they are trying to price risk more sensibly by tightening lending criteria.
Businesses say that they are being charged extortionate rates of interest on credit - if they can get it at all - and that recent falls in wholesale funding costs are not being passed on to borrowers.
This tension has been exacerbated by the imbalance between customer loans and deposits, estimated by the Bank of England to be a whopping ã800bn last year.
Unless banks receive more retail deposits - a stable source of much-needed cashflow - they will not have the capital to lend in greater volumes. The problem is, many people don't have enough disposable income to save and those that do are getting few bucks for their bang, with the base rate marooned at 0.5% and savings rates dropping like a stone.
Businesses are already seeking alternative havens to access funds vital for their expansion or survival.
Smaller equity investors could become a much larger influence if mainstream banks continue their stand-off - which they will.
Darling's recent bank-bashing is little more than a PR exercise. He knows as well as anyone that businesses will have access to less, and more expensive, credit until the banks are restored to full health. And that will take years.
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