Treasury To Boost Business Lending

Fri, 28 Nov 2008

Chancellor Alistair Darling is preparing a list of measures designed to boost business lending, according to the Financial Times.

Mr Darling has already warned UK banks that they risk full nationalisation "unless they reopen credit lines to struggling companies", but is looking to introduce a comprehensive package of measures that will force banks to treat corporates more fairly.

The new regulations include forcing banking institutions to give companies more notice of changes in lending rates or withdrawal of credit lines and extending government guarantees to support new business lending .

Ministers are under increasing pressure from companies and the opposition Conservative party to take bold action in boosting business lending, the FT revealed.

To begin with, Mr Darling expects the Financial Services Authority and Office of Fair Trading to regulate to stamp out what he calls "bad practice" by banks in changing the terms of loans at short notice.
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