British banks must not keep cash back from feasible applications for loans from companies in order to boost their balance sheets, a senior government official has warned.
Deputy prime minister Nick Clegg has urged financiers to recognise the fact they benefit from giving credit to companies, meaning there is "no excuse" for them to deny requests for credit from viable organisations.
During a speech delivered at the Institute of Directors' annual convention today (25 April), Mr Clegg - who is also MP for Sheffield Hallam - stated: "My message to the banks is this - don't sit on your hands while firms are crying out for cash."
The minister went on to indicate he realises lenders face a tricky time ahead as they look to restructure their businesses to comply with more stringent regulations that are incoming.
However, he insisted banks' attempts to meet these fresh capital requirements must not be made "at the expense of British business".
By Gary Cooper