-BOE FLS: Net Lending By FLS Participants Stg0.5 bln; Drawdowns stg4.4bn
LONDON (MNI) – The Bank of England and the Treasury’s joint Funding
for Lending Scheme appears to have got off to a slow start, with banks’
net lending only nudging higher.
The FLS was only activated in August and net lending by financial
institutions participating in the scheme had risen by just stg0.5
billion to the end of September, with total drawdowns stg4.4 billion,
according to the BOE data. Participation in the scheme, however, is
widespread with 35 groups making up over 80% of the stock of lending to
the real economy involved.
The FLS is the BOE’s flagship credit easing scheme, intended to
bring down funding costs and boost bank lending to the real economy.
The stg4.4 billion in drawdowns, however, amounts to around a mere 0.3%
of GDP.
BOE Executive Director Markets Paul Fisher issued a statement
alongside the data defending the FLS, arguing these figures were too
early to provide a reliable indication of the scheme’s impact.
“I am confident that the FLS will help the supply of credit …
Since the scheme was announced we have seen widespread falls in funding
costs across different sources and an equally wide variety of lending
rate reductions. But it is too early to use these data as a reliable
indication of the impact of the FLS on lending volumes,” Fisher said.
The latest BOE report only covers the period up until the end of
September. Anecdotal evidence from mainstream UK lenders suggest the
scheme is starting to help push lending funds through the system in both
October and November.
-London newsroom: +44 207 862 7491 email: drobinson@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
