The Business Secretary told the Financial Times that capital rules set by the Bank to protect lenders from future shocks were holding back small business lending because they were too tough.
“One of the anxieties in the business community is that the so called ‘capital
Taliban’ in the Bank of England are imposing restrictions which at this
delicate stage of recovery actually make it more difficult for companies to
operate and expand,” said Mr Cable.
“It is clear that the main banks are failing to support good British companies
in key areas like exporting and innovation."
The new “leverage ratio” target, which require lenders to hold Tier 1 capital
equal to 3pc of their total loan book, has attracted fierce criticism from
lenders.
Graham Beale, the chief executive of Nationwide, which fell short of the
requirements, warned last month that the Bank's “crude” measure would
constrain its ability to lend.
Mr Cable's comments came as data showed that net lending to companies rose in June after months of decline.
Figures from the British Bankers' Association (BBA) revealed net borrowing by non-financial firms edged £172m higher in June against a £2.7bn net repayment in May. It was the first rise in net lending since January.
David Dooks, BBA statistics director, said: "Second quarter gross domestic product is expected to have strengthened and as economic conditions improve the banks are providing the finance to help growth."
The data fuels hopes that the Bank of England and Treasury's Funding for Lending Scheme (FLS) is starting to have a positive impact after it was extended in April and tweaked to boost small business lending.
But the BBA added that net lending to businesses continues to fall on an annual basis as large firms are increasingly turning to equity and bond markets for funding, while small firms are preferring to save to pay for expansion.
Separate data also out from the BBA showing lending by postcode for the first time revealed small firms across nearly all regions of Britain saved more than they borrowed last year.
Small and medium sized businesses (SME) in around three quarters of the 120 postcode areas had higher net deposits than loans at the end of 2012.
Mr Cable's comments came as data showed that net lending to companies rose in June after months of decline.
Figures from the British Bankers' Association (BBA) revealed net borrowing by non-financial firms edged £172m higher in June against a £2.7bn net repayment in May. It was the first rise in net lending since January.
David Dooks, BBA statistics director, said: "Second quarter gross domestic product is expected to have strengthened and as economic conditions improve the banks are providing the finance to help growth."
The data fuels hopes that the Bank of England and Treasury's Funding for Lending Scheme (FLS) is starting to have a positive impact after it was extended in April and tweaked to boost small business lending.
But the BBA added that net lending to businesses continues to fall on an annual basis as large firms are increasingly turning to equity and bond markets for funding, while small firms are preferring to save to pay for expansion.
Separate data also out from the BBA showing lending by postcode for the first time revealed small firms across nearly all regions of Britain saved more than they borrowed last year.
Small and medium sized businesses (SME) in around three quarters of the 120 postcode areas had higher net deposits than loans at the end of 2012.