Not a cunning plan

Credit easing - now there's a thing. But it seems half-baked somehow. The Guardian tries valiantly to explain:

George Osborne and the Treasury are still trying to work out exactly what their version of "credit easing" looks like but it is likely to involve buying corporate bonds – IOUs issued mainly by big companies – rather than bonds issued by the government (which is what the Bank of England's "quantitative easing" is).

Several possibilities are being floated. Bonds could be bought directly in the £180bn corporate bond market. Buying bonds issued by small and medium-sized enterprises (SMEs) directly is less feasible as they don't really exist. Instead banks could package small company loans and overdrafts into so-called securitisations which could then be bought.

The Treasury could ask the Bank to buy them directly, or it could create a "special-purpose vehicle" to buy them.

The key question is how would the money feed through to businesses? It seems Osborne is trying to avoid the Treasury making direct loans. Instead, by taking loans off the banks' hands, the Treasury hopes lenders will be willing to take on more risks and lend to firms that might otherwise be turned away.

But then most of what Slasher Osborne touches turns to dross. I suppose we must give him credit for recognising that Project Merlin (remember that?) has failed miserably and that something different must be done.