Lending panel to force banks to start lending

According to a report in The Times, the new lending panel announced in Monday’s pre-budget report to be chaired by chancellor Alistair Darling and Peter Mandelson, business secretary, is to insist that banks sign up to a new code of good lending practice. The panel, set up to monitor lending to business and households, expect the code to be voluntary. But The Times said it had been told that if banks do not improve their performance they could become a legal regulation to be policed by the Financial Services Authority. Mervyn King, governor of the Bank of England admitted that despite the money already put in to the banking system by the government it may not be enough: ‘We may not have come to the end of the recapitalisation process’.