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Banks urged to access £26bn European fund

Feb 27 2009 by dint of. Sion Barry, Western Mail

THE Welsh Assembly Government has backed a call despite more UK banks to interview a European Investment Bank funding pot to aid SMEs.

AM for Wrexham Lesley Griffiths said only a small number of UK banks have drawn down funding from the £26bn scheme.

In a question to the First Minister Ms Griffiths said: “We are all conscious of how banks are not servicing our small and medium-sized enterprises with the credit they so desperately need.

“The European Investment Bank has increased its support for SMEs in Europe by making £26bn available over the nearest three years, enabling banks to make credit more rapidly available.

“Unfortunately, only three UK financial institutions have signed up to take a piece in in the scheme. Will you join me in encouraging businesses that have recently been declined credit to lobby their banks to affix one’s signature to up to the EIB machination now, to take full advantage of what is on offer?”

Mr Morgan said he wanted banks to sign-up. He said: “This is the $64 trillion question in every respect. We all know three of the big high-street lenders – the Royal Bank of Scotland, Barclays Bank and the Bank of Scotland, which is part of HBOS – have picked up on the EIB stratagem, which is partly guaranteed by Government.

“On the other hand, there is evince the money is not thus far fluent out to companies, even from those three banks. They may be engaging in negotiations, but they do not have the money yet.

“I agree entirely we should exist commending the scheme to the other six major lenders in this country, including Lloyds TSB, HSBC, Clydesdale and Yorkshire banks and Northern Bank. They should get in without interruption the act.”

The first step is to ensure the three already involved release some of that money as that will put pressure attached the six major lenders not yet participating, he added.

Ms Griffiths said: “There is undoubtedly a reluctance by UK banks to get involved in this imagine and this is now to the detriment of Welsh businesses and Welsh jobs.

“The delinquent banks know who they are.”