LONDON (MNI) – The UK’s leading business organisation and the chair
of the House of Commons Treasury Select Committee have urged the
government and the Bank of England to take futher action to get bank
lending to the real economy flowing.
In a letter to Bank of England Governor Mervyn King, Treasury
Select Committee Chairman Andrew Tyrie MP warned that banks were
struggling to lend as the euro zone sovereign debt crisis has infected
interbank lending markets.
The scramble to raise further funding in order to meet new capital
requirement targets has further compounded that problem, Tyrie wrote.
“I am writing on behalf of the Treasury Select Committee to seek
reassurance that you are examining carefully the effects that some of
the post-crisis regulatory action and the market responses to it, in
particular respect to bank liquidity,” Tyrie wrote.
“This is an issue which I hope the Bank of England’s new Financial
Policy Committee is carefully examining,” Tyrie wrote.
In a question and answer session at a press conference here,
Confederation of British Industry Director-General John Cridland said
that the government needs to look at “uncoventional measures” to support
businesses who were struggling to access credit.
“The reasonable expectations we had in the early part of the year
for growth have been disappointing, governments need to do more when
private sector has to do less, this is particularly relevant to the
credit issue,” Cridland said at a press conference here.
“I think that the reason that you’ve seen the Treasury and Osborne
(UK finance minister) in his speech at the party conference begin to
look at these very unconventional measures is that they look forward
over the winter and with some of the things we’re seeing in Europe they
see a further gumming up of the banking market, a further constraint on
what the banks can deliver,” he added.
–London newsroom: 4420 7862 7491; email: ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
