Project Merlin will not be repeated this year

Date: 14th February 2012

The government has turned its back on Project Merlin, instead favouring a new credit easing scheme.

It comes after recently-published figures revealed that the targets set under Project Merlin with regard to lending to small businesses were not met.

The UK's five leading banks - RBS, Barclays, HSBC, Lloyds and Santader - were obligated to lend £76 billion under the terms of the project but missed the target by some £1.1 billion.

It is unclear if the government will impose any penalties on the banks, but the coalition has decided that the project will not operate in 2012.

Instead, the government is planning the launch of a new credit easing scheme.

The new scheme will aim to make £20 billion available to small businesses over the next two years under a National Loan Guarantee Scheme.

RBS has come in for much of the criticism for missing the target after it refused to reveal its figures.

The other four banks have revealed that for their part, the targets were met or exceeded.

Posted by Jacob Williams