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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