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.”