Bank chiefs could be forced by the Government to name and shame branch managers who refuse to lend cash to struggling small businesses.
Vince Cable, the Business Secretary, will today challenge the banks to publish weekly information about their lending levels – right down to individual branches.
And he will warn that ministers are prepared to legislate to require banks to release the information if they fail to do so voluntarily.
The move comes amid continuing complaints – both within Whitehall and from industry – that the banks are sitting on cash reserves rather than passing them on to small firms.
Mr Cable is calling on them to break down the information by branches as well as constituencies in order to allow MPs to pursue managers who fail to support viable local businesses through the downturn.
In a speech today, the Business Secretary will express his frustration over their cautious approach to lending.
He will disclose that he and his Tory deputy, Michael Fallon, have contacted the heads of the major banks to demand transparency over their lending levels.
He will say: “I’d be surprised and very disappointed if this information was not already available each week in spreadsheet form on every chief executive officer’s desk, so that they can pursue poorly performing managers. And it should be shared, not just with Government – but with Parliament, which holds Government to account.”
Mr Cable will warn: “In the absence of cooperation we shall seek a regulatory solution.”
He will say there has been a “remorseless” decline in lending to small companies, with a drop of £7.8bn over the last 18 months and no sign of a turning-point.
Mr Cable will contrast that with banks viewing mortgage lending as “relatively safe – despite recent experience of a property bubble”.Reuse content