Piltdown Man,
When you say things will be going in the right direction when banks will lend at Libor plus 3-4% instead of 10%, what sort of loan purpose are you speaking of? BBVA make flight training loans for CTC, FTE and OAA at 90-day Libor plus 2.25%, a rise of .25% from what they charged pre-recession.
I would say when Libor is up to 3-4%, things will be heading in the right direction. A growing economy will mean more people are more willing to borrow, whether for a mortgage or other wants/needs. People wanting property will jump in when they think prices are on the rise for good. Demand for loans will drive up interest and we'll know recovery is in motion.
The only bank I know of charging high interest for flight training loans is NatWest. Their rate is unethical in my opinion, ranging anywhere from base rate plus 4% secured up to base plus 7% unsecured. It's bad enough when a recession leads to defaults, but with this loan, recovery could lead to defaults!