Banks rebuff Mark Carney's £90bn loan strategy

The Bank of England governor's attempts to increase lending have been rejected by some of the UK's largest banks.

by Gabriella Griffith
Last Updated: 27 Sep 2013
Just as David Cameron was being thwarted by his own cabinet, it looks like Mark Carney was having his own ‘Cameron’ moment over in Threadneedle Street. In what can only be described as a massive two fingers up to Carney, the four biggest banks in the UK have said they won’t be using his softening of liquidity rules to lend more.

In his speech on Wednesday, Bank of England Chancellor Mark Carney revealed plans to loosen the liquidity rules for the ‘safest banks’ in a bid to free up £90bn for lending.

But, according to a report by City AM, given the opportunity, the banks would spend their extra pennies doing other things.

It reports that Lloyds intends to use the liquidity to prove how well it has recovered – garnering confidence from investors.

Meanwhile over on Churchill Place, Barclays is planning to relocate its buffer to ‘use resources more efficiently.’

RBS has defiantly said it wants to lend but can’t find any creditworthy borrowers - and HSBC has apparently ‘long been proud of its strong, deposit-funded liquidity position’.

Ouch. It’s another wave of bad news for borrowing, considering the Bank of England has just released figures pointing to a £0.9bn drop in small business lending. As Mark Carney is descovering for himself, encouraging banks to lend more isn't just a case of showering them with money.

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