By Max Clarke

George Osbourne delivered his statement on banking today, under Project Merlin. Intended to stimulate business, primarily in the form of a £190 billion loan pool, project Merlin also outlines several other banking reforms, including pay and cash bonus restrictions restrictions.

Commenting on today's banking statement are Business Secretary Vince Cable, and the Confederation for British Industry.

Mr Cable said:

"Today's agreement is a good step forward for British business. Banks have made a commitment, with independent monitoring, to increase credit to UK firms and especially to small and medium sized enterprise.

"Tougher mandatory disclosure rules covering the top eight executives outside to the board will give the UK the most transparent financial regime in the world, while linking executive pay to lending gives businesses a crucial assurance that bank executives have a stake in the real economy.

"This is part of an ongoing process of reform of the banking sector. We are in no way pre-judging the big structural questions being addressed by the Independent Commission on Banking, including competition and the structure of banks."

Matthew Fell, Director for Competitive Markets at the CBI, said:

“It’s good news that banks have agreed to lend more to businesses, and that there will be more transparency in this area.

“An increase of up to 15% on last year’s lending could make a real difference to small and medium-sized firms with high-growth potential, as demand picks up.

“The Government’s commitment to maintain the UK’s competitiveness as a leading global financial centre is welcome. It now needs to address issues on an internationally coordinated basis.”