Darling’s dressing down of banks met with indifference
CHANCELLOR Alistair Darling urged bank bosses to increase credit to small firms in a meeting at the Treasury yesterday, but found his efforts dismissed as a PR stunt by City figures and politicians alike.
Darling summoned the chief executives of the UK’s major banks to Whitehall, as part of ongoing meetings aimed at resolving the crisis of funding to small businesses.
“I’ve made it clear that we need to get lending going, particularly to small and medium-sized businesses in this country,” he said.
He signalled that the Treasury would pore through the books of individual banks to ensure that businesses were getting the best deal.
But British Bankers’ Association (BBA) chief executive Angela Knight poured scorn on the high-profile nature of the meeting.
“My message to the chancellor is that what we should be doing here is not exchanging one-liners on TV and radio programmes.”
She pointed out that although the Bank of England’s base rate was low, wholesale funding was proving costly for banks.
Her comments came as BBA figures showed that lending to small firms rose by £391m, quickening the pace from a £287m increase seen in April.
Darling warned that if banks did not increase their supply of affordable loans to small and medium-sized businesses they would face the threat of a competition investigation if compelling evidence of market failure emerges.