UK banks to form lending task force

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British banks are hoping to shed the image they have been unwilling to lend to businesses during the downturn by pledging to form a taskforce to help prompt a new wave of loans.

Stephen Green, the chairman of HSBC and the British Bankers' Association, wrote a letter to George Osborne last week outlining proposals to help stimulate the private sector recovery in the economy.

He said high-street banks planned to form a taskforce, saying there was a "need to make sure viable businesses are able to obtain the finance they need to support the recovery of the UK economy".

The taskforce will study the problems that are currently affecting the securitisation markets and consider what more can be done by the banks to create a "stronger and more sustainable" market for business finance. Mr Green said it would also explore the other issues affecting the ability of UK companies to raise financing.

The taskforce will include a steering group of the heads of the six large UK banks, chaired by Mr Green. The work will be supported by the Treasury, experts and the Department of Business, Innovation and Skills.