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24 Apr 2013
Forex Flash: BOE announces modifications to funding – Investec
FXstreet.com (Barcelona) - As expected, the Bank of England and Treasury have today announced a number of modifications to the Funding for Lending Scheme in an effort to boost lending to small and medium sized companies.
The scheme will be extended for another year to January 2015. Further, from 2014 every £1 of net lending to SMEs will allow banks to draw down £5 from the FLS. Over the remainder of 2013, £1 of net SME lending will boost banks’ FLS allowances in 2014 by £10.
According to the Investec Research Team, “Banks will also have to report their lending to their non-bank subsidiaries, which offer credit in order to encourage them to lend to the private sector.” Meryvn King and co’s hope is that the adjustments and extension to the scheme will provide a structure that will help raise funding directed to the neglected SME sector, in the face of criticism that the scheme has so far only been of benefit to banks and homebuyers.
The scheme will be extended for another year to January 2015. Further, from 2014 every £1 of net lending to SMEs will allow banks to draw down £5 from the FLS. Over the remainder of 2013, £1 of net SME lending will boost banks’ FLS allowances in 2014 by £10.
According to the Investec Research Team, “Banks will also have to report their lending to their non-bank subsidiaries, which offer credit in order to encourage them to lend to the private sector.” Meryvn King and co’s hope is that the adjustments and extension to the scheme will provide a structure that will help raise funding directed to the neglected SME sector, in the face of criticism that the scheme has so far only been of benefit to banks and homebuyers.