A CORPORATE recovery lawyer from the North-East has come to the defence of the embattled banks, claiming blaming them for the current crisis is too simplistic.

Julian Gill, a partner with Newcastle-based law firm Dickinson Dees, believes the banks have been unfairly made scapegoats as the recession begins to bite.

Mr Gill, who works in the insolvency and corporate recovery department, which has just announced a 40 per cent increase in its fee income during the past 12 months, argues that the banks are facing pressure from all sides and that their room for manoeuvre is limited.

“It has become fashionable to paint the banks as the villains of the recession and it is certainly true that episodes such as Sir Fred Goodwin’s controversial pension do not help their cause.

But I believe that attacking the banks is too simplistic and ignores the complexity of the position they find themselves in,” he said.

Mr Gill said it is becoming increasingly common for overseas banks to withdraw their credit facilities to British companies, leaving British banks to cover the shortfall.

With some British companies facing a bleak future, thanks to cancelled orders and contracting cash flow, this has put the British banks in a difficult position.

“Banks are now having to price for risk. That means their charges are higher than normal.

No doubt, when the recession starts to show signs of easing and the risk lessens, the banks will act accordingly,” added Mr Gill.