the UK’s business bank accounts are still struggling with a gap of approximately £450bn between how much they lend and how much they hold to support their loans, according to new data released by the Bank of England.
Eric Daniels, CEO of Lloyds Banking Group spoke last week concerning the impaired ability of banks to provide financing for their personal and business loan operations.
In Britain alone, the BoE calculates that the UK’s banking institutions are still experiencing a gap of £450bn between what hold in deposits and what they lend out in personal and business loans. While this number is much reduced from the nearly £1 trillion during the height of the banking crisis, the still-hefty sum means that financial institutions are in need of new ways to support their lending practises; the alternative is to reduce their lending even further in regards to households and businesses.
Daniels continued, stating that of its loan book of £600bn, Lloyds needed to refinance £132bn of it; additionally, the City is of the belief that the bank is using the special liquidity scheme the BoE introduced during the darkest days of the credit crunch on a massive scale.
In total the Bank of England has disbursed £165bn in funds through their special liquidity scheme. The facility was considered integral to funding Lloyds in the days after their acquisition of HBOS. While the SLS usage window closed in January of 2009, banks that had utilised it had been given until January 2012 to secure alternative funding.
While the clock ticks down in regards to refinancing banking institutions, RBS recently revealed that it utilised funding from the BoE to the tune of £21.4bn, most likely through its SLS programme; RBS additionally said that they had reduced that number by £4bn.