Darling urges banks to lend
CHANCELLOR Alistair Darling will today put bank bosses in the dock over concerns that they are not lending enough.
In a meeting at the Treasury, Darling will urge lenders to reward taxpayers for their support of the banking system by offering loans at more competitive rates.
Speaking in a television interview, the chancellor said he was “extremely concerned” that rates being offered by major lenders were too high.
His comments came in the light of a survey by finance website Moneyfacts.co.uk showing that average interest rates have risen over the past three months.
But the British Bankers’ Association (BBA) maintains that lending to small firms rose by £391m in June, picking up the pace from the £287m increase seen in April.
BBA chief executive Angela Knight told City PM that rates were high due to expensive inter-bank lending, the risk of loan defaults and government capital requirements.
A spokesman for the Federation of Small Businesses, said there was “no excuse” for banks to charge more than three per cent above base rate and warned that lenders spooked by the threat of a double-dip recession could “batten down the hatches”.