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Barclays rejects idea of lending targets

Barclays head of small business Steve Cooper says he will not join any Government scheme that sets lending targets for UK banks.

The Government has urged banks to increase lending to small business and has explored different option to do so. Earlier this month, Chancellor George Osborne said the Government “would not tolerate banks piling the pressure” on small businesses and said it is their obligation to increase lending.

But according to the FT, Cooper has slammed the idea, saying it would encourage irresponsible lending.

He says: “I’m not going to sign up to a target,. I don’t want to create an expectation that if Barclays said no on Thursday it could say yes on Friday [because it has a target to achieve].”

Cooper also says banks are facing tough conditions with increased funding and more demanding capital requirements and therefore banks are pricing accordingly.

He says: “There has been a real shift in risk profile, which is reflected in the price. Also, the cost of borrowing has gone up materially and banks are having to hold a lot more capital.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. “…banks are pricing accordingly”.

    This is near the truth of all the banks not just Barclay’s –

    They are not minded to help British business nor care about the economy at large. Any excuse is used not to lend for expansion or new projects it is a spiral downwards that is as bad as the upward property based spiral that got us to where we are now.
    We have seen Germany produce strong recovery figures today helped greatly by German banks lending to German Industry which the latest lending figures show strong and growing support.

    Chancellor Osborne has a big job on that’s for sure.

  2. Like I said ~ barking at the moon don’t mean squat, Georgey Boy. What’s your plan if the banks tell you to p off and mind your own business?

    You could offer to guarantee a percentage of sums lent, so the risk to banks would be reduced. And you could offer the banks financial incentives if they meet certain lending targets. But just spouting on about obligations isn’t going to change anything.

    Perhaps get Mark Hoban on the case ~ he seems to be a radical, progressive and modern thinking sort of guy. Just look what he’s already done on the pensions front.

  3. Sales targets will not come under the same caution.

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