Recovery since Credit Crunch 2008

The banking crisis that started in 2007, which saw the collapse and takeover of many of the World's largest banks, for example, Lehman Brothers and Bear Stearns, led to the credit crunch of 2008. The consequences included; rising cost of bank lending, and bond and equity finance; depressed house and share prices;  reduced consumer confidence and spending; and negative impact on UK exports.
Prior to the crisis, the majority of developed countries were experiencing one of the longest periods of time with low interest rates. This encouraged borrowing and spending and discouraged saving leading to a housing market boom in the UK and the US. This also led to "predatory lending" to sub-prime borrowers who should have been more doubtful borrowers because of their diminished ability to repay.
The banks became greedy and soon found new ways to sell credit such as derivatives and Collateralised Debt Obligations (CDO's). These subsequently failed.
Rescue plans were produced by Governments all over the world; the US tried to secure a $700bn bailout fund but was denied in a vote by Congress; part-nationalisation of RBS, Lloyd's TSB and HBOS and £50bn from the Treasury with an additional £200bn  from the Bank of England for a rescue plan in the UK; also in the UK, a bank debt guarantee of £250bn; and Switzerland sets up a $60bn "toxic debt fund". £119bn alone went to Northern Rock in the UK.
The UK is now on its way to recovery, but there is still quite a way to go as consumer confidence and spending is still low and interest rates are still not at ideal levels. The economy has not been kick-started again yet.
This leads onto the Funding for Lending scheme started by the Bank of England and the UK treasury to encourage UK banks to start lending to companies and households. Set up in 2012 it has recently been evaluated to measure its success so far and whether or not it has helped the economy out of the recession. The scheme has £60bn available to banks for lending purposes. It is a way to provide cheap finance to those who need it to restart the economy.
While this is a great idea in theory, there is a chance that the opportunity for cheap finance will not be taken up because there is no demand for it.
As of March 4th, 39 banks had taken part in the scheme, withdrawing £14bn worth of loans. However, the net borrowing figure fell by £2.4bn in the last quarter of 2012 suggesting that the loans are taking a while to have an effect due to the time taken to approve loans.
While the idea here is a good one surely the treasury could be using the money on a more productive scheme? The funds are available until December 2012 but by the end of 2013 they should have a better idea of the success of the scheme so far. It is quite a small way of improving consumer confidence and increasing spending. I believe that they should find a better way to motivate banks to provide cheaper loans/mortgages to the public and to businesses. An incentive scheme could be argued for that would reward banks who give mortgages at a certain level. All it requires is one or two banks to start and the rest will fall in line.