Bar too high on business lending

Business Secretary Vince Cable has committed the government to taking a tougher line on parts of the banking system that have “not served enterprise in this country as well as they could.”

Mr Cable was addressing an audience at the Cass Business School in London when he also promised to redouble our efforts to ensure that bank lending agreements from banks that have benefited from taxpayer subsidy are being honoured – especially for SMEs”

While the banks would argue that demand is low for business loans Mr Cable said: “If the bar is set too high, of course no one is willing to jump. The current risk aversion by banks in the SME sector will stifle recovery and, if it does, will actually rebound on the banks through bad debt.”

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