This morning Prime Minister Gordon Brown revealed the creation of the panel alongside reforms to the mortgage conduct code. Business secretary Peter Mandelson this afternoon launched the new panel to monitor how banks are lending to small businesses.
The five major high street banks – HBOS, RBS, Lloyds TSB, HSBC and Barclays – reached an agreement with the government to provide data on the availability, risk and overall cost of lending to small and medium sized businesses at the first meeting of the Small Business Finance Forum.
The panel will be made up of senior Department for Business and Treasury officials and representatives from the Bank of England. It will monitor individual lenders’ availability, risk and overall cost of small business lending.
The Forum also secured an agreement from the British Bankers’ Association to work with Small Business organisations to fundamentally revise the Statement of Principles which set out how banks and businesses work together.
Mandelson says: “It is critical we understand what finance is available for small businesses and this monitoring panel will give us greater insight into the situation at ground level.
“I want this Forum to make a difference. We have opened up a dialogue between small businesses and banks, and we will continue to work together to make sure we have the resources in place to see UK plc through this difficult economic climate.”