Banks refill the finance gap

Banks are supporting individuals and businesses British Bankers' Association Chief Executive Angela Knight said today.

She said the major high street banks were currently providing around two-thirds of all new home loans and were stepping up to fill the lending gap created by overseas banks retrenching to their home markets.

Mrs Knight said UK banks were willing to lend and were acting to help the UK economy.

Mrs Knight said: "UK banks are working to support individuals and businesses and to fill the UK's lending gap. But demand is weak with people being cautious and repaying short term loans.

"There is a limit to how much of the burden banks can bear alone. They are being squeezed by calls to lend more - while they being told that they need to look for deposits before doing so.

"And there are fewer lenders active in the market. Banks are already providing around two thirds of new home loans as others are currently unable to provide mortgages. Banks are still lending - even for cars and vans where, traditionally, loans have come through finance houses.They are being looked to to fill the gap in large business finance caused by overseas lenders retrenching to their home markets."

Mrs Knight was addressing the Society of Conservative Lawyers on future of banking regulation. She said that although the subject was regulation the key issue for everyone today was getting the economy moving.