Banks still failing to lend fairly to struggling businesses

Thu, 30 Jul 2009

The treasury is to send in auditors to ensure that loans are made available to cash-strapped firms. British high street banks will be forced to undergo individual audits of their lending practices by the Treasury as it is claimed they are still failing to lend fairly to struggling businesses .

The Chancellor, Alistair Darling, has said that each bank would have "someone looking over their shoulder" to ensure they were not failing to pass on record low interest rates to small businesses. The Treasury has hinted that the matter will be referred to the Office of Fair Trading (OFT) if a lack of competition in the banking sector is to blame.

Mr Darling said the audits, which will be conducted over the next few weeks by the City minister, Paul Myners, will "get to the bottom" of why some smaller businesses are continuing to be subjected to severe lending terms, despite the bank rate sinking to 0.5 per cent, which allows the banks themselves to borrow cheaply.
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