Oct. 30 (Bloomberg) -- National Australia Bank Ltd.’s Clydesdale was among 17 new lenders that joined the Bank of England’s program aimed at boosting credit to companies and households.
Data published today by the central showed that 30 lenders with 1.33 trillion pounds ($2.14 trillion) of loans outstanding to non-financial companies and individuals as of June 30, have signed up to the Funding for Lending Scheme. Based on FLS rules allowing banks to borrow 5 percent of their stocks of loans, that means they can tap the Bank of England for an initial 66.3 billion pounds.
Clydesdale, based in Glasgow, was the largest new lender in the FLS, with loans of 33.2 billion pounds. The second biggest was Co-Operative Bank Plc, with 31.8 billion pounds. The new total compares with data on Sept. 25 showing 13 banks with loans of 1.21 trillion pounds had signed up. The Bank of England published today’s list after processing more applications.
The program, designed with the U.K. Treasury, allows banks to borrow at cheaper rates for as long as four years. It is aimed at reducing the cost of borrowing and is the latest in a series of measures introduced to help the economy fend off contagion from the turmoil in the euro area. Banks have been able to borrow treasury bills from the Bank of England since Aug. 1, and the central bank had said its new lending plan could boost credit to companies and households by at least 80 billion pounds.
Under the FLS, a bank can initially borrow treasury bills valued at 5 percent of outstanding loans, plus any expansion of lending during a reference period from that date to end-2013.
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