-Says Significant Number Of Other Banks To Sign Up Shortly
-Libor, Other Scandals Sucking Confidence Out Of Financial Sector

LONDON (MNI) – Bank of England Monetary Policy and Financial Policy
Committee member Paul Fisher has announced that the banks and buildings
that have signed up for the Funding for Lending scheme account for
almost three quarters of the stock of lending to UK households and
corporates with more banks set to sign up shortly.

“Together these banks account for around 73% of the stock of
lending to UK households and corporates. I should also note that a
significant number of other institutions are close to signing up too and
we will update this table in due course,” he said.

Fisher also said that the BOE will publish data in December on how
much of the money set aside for the FLS scheme has been used by banks.

“We will publish the first set of drawdown data in December,
although you will have seen that one bank has already announced that it
has drawn Stg1bn and plans to draw more. That said, it will probably
take some time for banks to review fully their lending plans, and it is
likely that drawings from the FLS will be spread out over the full
window to end-2013,” Fisher said.

In a speech at Richmond University here, Fisher also said that he
is confident that the BOE’s Funding for Lending scheme will help get
more credit flowing from the financial sector to the real economy.

But in other comments, Fisher seemed to temper his confidence in
the new scheme:

“I am confident that the FLS will help the supply of credit. Before
its introduction, it was more likely than not that the stock of credit
would contract further over the next 18 months. Perhaps it still may.
But any return to positive credit growth would be a better outcome than
we could have previously hoped for,” Fisher said.

Fisher also said that in the world of central banking,
unconventional monetary policy actions represent a “new normal” .

The MPC/FPC member also said that the ongoing Libor investigations
and other scandals were sucking confidence out of the UK financial
sector.

“A series of home-made disasters have also rocked the sector. The
UBS “rogue trader”, the losses at JP Morgan’s Chief Investment Office,
LIBOR manipulation at Barclays (with others under investigation) and the
mis-selling of PPI. These scandals have not so far been
institution-threatening, but coming on top of the financial and
macroeconomic crisis to date, they have helped to suck confidence from
the financial sector just when it might otherwise have been recovering,”
he said.

Fisher also said that in the world of central banking,
unconventional monetary policy actions represent a “new normal” .

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[TOPICS: M$$BE$]