Business secretary Peter Mandelson has announced the creation of a panel to monitor how banks are lending to small businesses. At the first meeting of the Small Business Finance Forum this week, the five major high street banks reached an agreement with the government. They will provide data on risk, availability and overall cost of lending to small and medium sized business. The forum also secured an agreement from the British Bankers' Association to work with small business organisations with a view to revising the statement of principles which set out how banks and businesses work together. Mandelson said: “It is critical we understand what finance is available for small businesses and this monitoring panel will give us greater insight into the situation at ground level. The panel, together with the revised statement of principals, shows a commitment to making progress on resolving the credit issues faced by small businesses.” Detailed talks are still to be held with the banks on an individual basis to reach tailored agreements on the provision of data to the panel. The monitoring panel will comprise of senior Department for Business and Treasury officials and representatives from the Bank of England.

© Crimson Business Ltd. 2008