UK banks urged to loosen lending criteria

13 July 2012

Britain's banks should look to loosen their business lending criteria in order to help stimulate the country's economic recovery.

That is the opinion of Dr Adam Posen, Bank of England (BoE) policymaker, who has called on financiers to do more in terms of providing the UK's financial system with greater levels of liquidity.

During a speech delivered at the offices of the KM Group in Strood, Kent, the official indicated it is "legitimate" to suggest banks have "gone too far in terms of their excessive caution" when it comes to providing loans to businesses, the Kent Messenger reports.

Dr Posen went on to insist that while the UK's fiscal situation is by no means "satisfactory", it is also "not as terrible as some people make it out to be".

"Going forward, we think the British economy will tick up towards two per cent growth rate towards 2013-14," the policymaker added.

By Asim Shah

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