Leading banks sign up to Funding for Lending scheme
By Marcus Leach
Paul Fisher, the Bank of England's executive director for markets, has said he is confident the Funding for Lending (FLS) scheme will help boost the supply of credit.
His beliefs will have been further increased by the news that most of the UK's leading banks have agreed to sign up to the scheme, that is aimed at making cheaper loans available to businesses and homebuyers.
HSBC is the only High Street bank not taking part, as it says it does not need more funding.
"I am confident that the FLS [Funding for Lending Scheme] will help the supply of credit," said Paul Fisher.
"Before its introduction, it was more likely than not that the stock of credit would contract further over the next 18 months."
However, Fisher does add a word of caution.
“We cannot expect every bank in the FLS to increase its stock of lending to the real economy over the 18-month [drawdown] period ... the crucial impact will be whether the FLS enables them to lend more than they would have done in its absence," he said.
The banks and building societies that have signed up are: Aldermore, Barclays, Hinckley & Rugby Building Society, Ipswich Building Society, Kleinwort Benson, Leeds Building Society, Lloyds Banking Group, Monmouthshire Building Society, Nationwide Building Society, Principality Building Society, RBS Group, Santander and Virgin Money.
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