TRADE minister Mervyn Davies has poured cold water on Bank of England deputy governor Paul Tucker’s suggestion that UK banks are hampering economic recovery.
Speaking at the Paris air show, the former chairman of Standard Chartered admitted that encouraging banks to lend through the economic downturn was “challenging”.
But when asked whether the lack of bank lending was impeding the recovery process, he said: “I don’t think its holding back the economy”
His comments clashed with Tucker’s suggestion at the Association of British Insurers (ABI) conference last week that “subdued” lending could lead to a recovery that would be “anaemic at best”.
Davies was appointed trade minister in January after Gordon Brown issued a distress call asking him to help the government deal with the banking crisis.
He has been working with the government on measures to address the banking crisis since last year and was previously a member of the Business Council of Britain.