Fitch gives thumbs up to plan to help banks and raise loans

Tim Wallace
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EMERGENCY measures to boost the economy will help support Britain’s banks against any collapse in the Eurozone markets, supporting credit ratings in the sector, said ratings agency Fitch yesterday.

However, the “funding for lending” scheme, through which the government and bank of England hope to give cheap funds to banks, will have a neutral impact.

That is because the funds will only be given on the basis that they are passed on to firms and households at low interest rates, the agency said.

However, the report did confirm that the plan “could help increase lending to small and medium-sized enterprises that have previously baulked at the current cost of borrowing,” as the chancellor and Bank of England governor hope.