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| Version 0 | Version 1 |
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| Bank lending scheme details due | Bank lending scheme details due |
| (about 9 hours later) | |
| Details of a scheme aimed at boosting lending by banks are to be unveiled by the Bank of England and the Treasury. | |
| The aim is to make billions of pounds of cheap funds available to banks but only if they use the money to boost loans to businesses and consumers. | The aim is to make billions of pounds of cheap funds available to banks but only if they use the money to boost loans to businesses and consumers. |
| The move is part of a raft of measures taken to try to increase lending. | The move is part of a raft of measures taken to try to increase lending. |
| But this is the first initiative which makes loans to banks conditional on the money being passed on through mortgages or business loans. | But this is the first initiative which makes loans to banks conditional on the money being passed on through mortgages or business loans. |
| The central bank could make £80bn available if High Street banks increase lending by 5%. | The central bank could make £80bn available if High Street banks increase lending by 5%. |
| Sir Mervyn King, the governor of the Bank of England (BoE), announced the "funding for lending" scheme last month in his Mansion House speech. | Sir Mervyn King, the governor of the Bank of England (BoE), announced the "funding for lending" scheme last month in his Mansion House speech. |
| Crucial to its success will be whether it really does persuade banks to make affordable credit widely available. | Crucial to its success will be whether it really does persuade banks to make affordable credit widely available. |
| Central bank efforts | Central bank efforts |
| It comes at a time when worsening conditions in the eurozone are making it harder and more expensive for banks to borrow. | It comes at a time when worsening conditions in the eurozone are making it harder and more expensive for banks to borrow. |
| Sir Mervyn told the BBC this week that the eurozone debt crisis had created "a great black cloud of uncertainty" hanging over global business. | Sir Mervyn told the BBC this week that the eurozone debt crisis had created "a great black cloud of uncertainty" hanging over global business. |
| Last week, the central bank announced it would pump a further £50bn into the economy over the next four months through its quantitative easing (QE) programme, taking the total stimulus to £375bn. | Last week, the central bank announced it would pump a further £50bn into the economy over the next four months through its quantitative easing (QE) programme, taking the total stimulus to £375bn. |
| QE aims to boost the economy by buying assets such as government bonds, in an attempt to increase lending by commercial banks. | QE aims to boost the economy by buying assets such as government bonds, in an attempt to increase lending by commercial banks. |
| The BoE has also recommended relaxing rules on liquidity reserves, so that banks can tap into the billions of pounds held on their balance sheets to use for lending. | The BoE has also recommended relaxing rules on liquidity reserves, so that banks can tap into the billions of pounds held on their balance sheets to use for lending. |
| And at the end of June it held its first £5bn monthly auction under a six-month loan facility programme, which provides banks with access to cash at cheap rates, should they encounter any short-term funding difficulties. | And at the end of June it held its first £5bn monthly auction under a six-month loan facility programme, which provides banks with access to cash at cheap rates, should they encounter any short-term funding difficulties. |
| Analysts have suggested there could be further stimulus measures on the way as the BoE tries to kick-start the UK economy, which shrank by 0.3% in first three months of this year and by 0.4% in the final quarter of 2011. | Analysts have suggested there could be further stimulus measures on the way as the BoE tries to kick-start the UK economy, which shrank by 0.3% in first three months of this year and by 0.4% in the final quarter of 2011. |