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King challenges banks to get lending
26 November 2008 15:34
The governor of the Bank of England has thrown down the gauntlet and challenged banks to begin lending once again.
Speaking at the recent Treasury select committee session, Mervyn King discussed the implications of the Bank's November inflation report.
The governor was speaking in the wake of the £37 billion banking bail-out, which many believed would help inject some much-needed life into the mortgage market.
Mr King said that the single biggest challenge was to get banks lending to consumers once again, stating that dealing with this problem was of utmost importance.
He added that despite recent statistics suggesting the lending remains reasonably strong, he and his committee knew from its own evidence that in actual fact small business and individual borrowing remained weak.
Statistics published this month by the British Bankers Association showed that net mortgage lending totalled £2.9 billion in October, substantially down from the six-month average of £3.9 billion.
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