Don't Hoard Cash, UK Deputy PM Tells Banks
First Published Tuesday, 24th April 2012 11:16 pm - © 2012 Dow Jones
LONDON -(Dow Jones)- Banks in the U.K. should get their balance sheets in order and meet new capital requirements, but not unnecessarily hoard capital when businesses need loans, Deputy Prime Minister Nick Clegg is due to say Wednesday.
"There is no excuse for turning down solid loan applications from viable firms," he said in the text of a speech he is due to give at the Institute of Directors' annual convention.
"My message to the banks is this...Don't sit on your hands while firms are crying out for cash. And understand that getting credit to businesses is in your interests, too," he said in the text.
The coalition government of Prime Minister David Cameron has launched a range of initiatives to boost lending to companies, particularly small and medium-sized firms, while also introducing tougher banking regulation to prevent a repeat of the credit crisis.
The more stringent capital requirements under the Basel III regulations aren't a reason to sacrifice business lending because banks have until 2019 to meet them, Clegg said.
"Yes, of course, get your balance sheets in order. Meet the new capital requirements. But don't lurch to the other extreme at the expense of British business," he said.