RBS boss Hester spies green shoots

17th Jun 2009 14:10

Royal Bank of Scotland boss Stephen Hester believes the global economy has turned a corner, but that it could be years before it's clear how much banks lost through loans secured against property.Talking to property industry bigwigs yesterday, Hester attributed the improvement to government action, but warned that demand for credit from borrowers must also fall. "The world has turned a very important corner and we have moved from an extraordinary case of fear of unprecedented financial meltdown to a conventional recession," he said.But added: "The banking system can support demand for credit but demand for credit should be falling. Borrowers have to save more and borrow less." "Sometimes the first green shoots suffer from frost and are the first to die."The level of potential losses to banks from loans secured against property is also a concern to Hester.Experts fear that banks could lose £100bn from their exposure to UK commercial buildings following a slump in values.