Banks loaned less under FLS in Q4, figures show

5 March 2013

British banks dished out less money under the government's flagship initiative to boost the supply of credit to businesses and households during the fourth quarter of last year.

That is according to new official data published yesterday (4 March) by the Bank of England (BoE), which showed that net lending from financiers participating in the Funding for Lending Scheme (FLS) declined by £2.4 billion ($3.6 billion) between October and December 2012.

Under the terms of the programme, banks and building societies are offered favourable interest rates on loans from the administration, on the premise that these savings are then passed on to consumers.

Figures show that 11 groups made drawdowns totalling £9.5 billion throughout this three-month timeframe, meaning a total of £13.8 billion has now been taken out as part of the FLS.

In a recent speech about the FLS, Paul Fisher, executive director for markets at the BoE, said the initiative has "clearly shifted the supply of credit".

By Gary Cooper

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development