We get to read about the state of the public finances, but not about the banks hidden behind regulation, which with their record-breaking tight financing line are holding back investments and making the national economy and Eastern Finland miserable. The increased interest rate offers banks record results after zero interest rates, but this is not reflected in the courage to finance investments.
In our amazement, we watch the margins on corporate loans rise, even though the general level of interest already makes many investments unprofitable. In addition, we constantly hear stories about how Hyvättää's downtown projects do not get loans on reasonable terms. Even if there were 50 percent of own money and a collateral value of 60 percent for the new downtown project, this 110 percent is not enough for the bank. Housing companies outside the core centers cannot get a loan, even though it is our national wealth. We wonder at the silence of the media and politicians, because the future of the whole of Finland is at stake here.
The fall in the value of real estate is historically strong outside the growth centers, but the banks' activities put a sign of potential on this development. Under the guise of banking regulation, banks are trying to retreat to almost risk-free lending. As a representative of the construction industry, we wonder about the banks' operations, because most of the banks' financial traffic concerns the construction and real estate industry. The Finnish economy does not run without economic activity brought by construction, and the future of banks does not look strange without the activity of the construction cluster.
Banks use this mechanism to drive construction companies into bankruptcy.
Now we also need courage from financiers. Eastern Finnish builders talk about banks that seem to be afraid of their own shadows. A home buyer cannot get a loan to buy an apartment in a new development, because banks do not trust construction companies. Banks use this mechanism to drive construction companies into bankruptcy. Where are the banks of old and their managers who trusted people and companies? This model of mutual trust and shared risk has financed the construction of Finland. The current line of funding decisions is centrally managed, which worsens the situation. With decisions made from afar, Eastern Finland looks desolated.
Capital-poor Eastern Finland cannot survive without loan financing. Without loans for new and renovation construction, the wheels of our economic system will slow down and Eastern Finland will become desolate. Funding, tightened to an unreasonable level under the guise of regulation, controls our economy and the value development of real estate more than recognized. Finland has not been financed and built as a welfare society without risk, and it is not considered viable, attractive and sustainable without financial risk. Finance and construction are interdependent parts of the economic system, but does banking regulation recognize this union?
The article was published in Savon Sanomat on March 14.3.2024, XNUMX.
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