Funding for Lending Scheme Launched

The Bank of England and HM Treasury have just announced their new Funding for Lending Scheme (FLS) to pump more money in to the UK economy. Where previous rounds of Quantitive Easy (QE) have failed to show the expected improvements in lending, the aim of the new FLS is to ensure money goes directly to the "real economy". The (initial) £80 billion scheme effectively makes more money available to banks and building societies, as with QE, but with the added incentive that eligible participants will be encouraged to build up sufficient collateral to support their future use of the scheme. In other words, if the instutions involved lend more they will be able to borrow more. In a joint press release the two stakeholders stated that: "…for every pound of additional rea... »