LONDON (MN) – Senior Bank of England official Andrew Bailey
suggested today that the Funding for Lending Scheme has led to more
activity in the mortgage sector than increased lending to SMEs.
Bailey, a BOE veteran who is currently Managing Director of the
Prudential Business Unit and a member of the interim Financial Policy
Committee, made the comments to the Joint Parliamentary Commission on
Banking Standards today.
Bailey noted that the Bank of England and UK Treasury had
introduced the FLS as well as other capital and liquidity measures
in the summer to ease credit access.
The official cautioned that it was “early days” in terms of
assessing the effectiveness of the FLS, but added that the evidence so
far “would indicate that there is more sign of activity on the mortgage
side than there is on the corporate lending side”.
Earlier in the same hearing Financial Services Authority Chief
Adair Turner said that banks needed to hold much higher levels of
capital than in the past, saying that previously banks had been allowed
to hold “ludicrously low” levels of capital.
Turner said that he and other senior regulators would be in favour
of banks having higher capital even than that demanded under Basel 3
rules.
–London newsroom: 4420 7862 7492 email: dthomas@mni-news.com
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