27/11/2008 - Banks 'must start lending to SMEs'
Britain's banks have been accused of failing to honour commitments made to maintain lending to small businesses.
The economic secretary to the Treasury, Ian Pearson, said banks had given their word to ministers, but this had not been reflected in their lending practices to businesses.
Mr Pearson said that ministers expected banks to make "competitively priced lending" available to both the mortgage market and small businesses.
Giving evidence to the Commons Treasury sub-committee, he said: "We will continue to want to hold the banks' feet to the fire to make sure that they do the right thing by small businesses."
Mr Pearson insisted ministers were not asking banks to not operate in a "normal commercial way", but "clearly we don't want banks to over-react to market conditions, to take blanket decisions that don't take account of individual company positions."
Copyright © Press Association 2008
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