Government attempts to boost bank lending to small businesses
Vince Cable, the Business Secretary is due to unveil a joint consultation paper with the Treasury later containing options to improve cash flow to businesses. Under the proposals, banks could be made to sign up to the same type of lending agreements placed on the part-nationalised RBS and Lloyds which include penalties on executive remuneration for failures to boost lending. There could also be an increase in Government loan guarantees and proposals to introduce regional stock exchanges in cities such as Birmingham and Edinburgh.
In a Sunday Times interview, Mr Cable said: "We are very worried about the behaviour of the banks. The banks are not acting in the national interest. I don't think they get it. At the moment we are talking to them in an amicable way and we are monitoring them, but if this doesn't work there are combinations of carrots and sticks that can be employed and they are under no illusions about that - and we are not either."