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25/09/2012
New 'Funding For Lending' Scheme Revealed
A new scheme designed to stimulate the economy by making cheaper loans available to firms and individuals has been launched.
Five of the UK’s six biggest lenders have signed up to the new scheme called Funding for Lending.
HSBC is the only one of the top six not taking part, as it says it does not need additional funding.
The Bank of England, which runs the scheme, said 13 banks and building societies had signed up so far.
They represent 73% of the market and £1.2 trillion worth of lending.
The institutions can borrow the equivalent of up to 5% of their loan books immediately, and more if they meet certain conditions over the next year.
Based on their current lending levels, the 13 institutions could initially draw on up to £60bn of Bank of England funding.
Paul Fisher, the Bank of England's executive director for markets, said that a "significant number" of other banks and building societies were close to signing up.
"I am confident that the FLS [Funding for Lending Scheme] will help the supply of credit," he said.
"Before its introduction, it was more likely than not that the stock of credit would contract further over the next 18 months," he said.
(H)
Five of the UK’s six biggest lenders have signed up to the new scheme called Funding for Lending.
HSBC is the only one of the top six not taking part, as it says it does not need additional funding.
The Bank of England, which runs the scheme, said 13 banks and building societies had signed up so far.
They represent 73% of the market and £1.2 trillion worth of lending.
The institutions can borrow the equivalent of up to 5% of their loan books immediately, and more if they meet certain conditions over the next year.
Based on their current lending levels, the 13 institutions could initially draw on up to £60bn of Bank of England funding.
Paul Fisher, the Bank of England's executive director for markets, said that a "significant number" of other banks and building societies were close to signing up.
"I am confident that the FLS [Funding for Lending Scheme] will help the supply of credit," he said.
"Before its introduction, it was more likely than not that the stock of credit would contract further over the next 18 months," he said.
(H)
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Northern Ireland WeatherThis Evening and Tonight:Rather cloudy and mainly dry at first, but showery outbreaks of rain soon extending westwards to most places during the night, turning heavier towards morning. Light winds. Minimum temperature 9 °C.
