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Project Merlin Agreement - Has It Worked?
Project Merlin is an agreement between the Government led by the Prime Minister David Cameron and four of the major high street banks in the UK.
The Project Merlin agreement also proposed to curb bankers’ bonuses and promote transparency regarding top earners and their salaries. So basically the banks have committed to lending more money in 2011, especially to small businesses, to pay less in bonuses than they did last year and to be more transparent about their pay packages. They have also said they will make a greater contribution to regional economies and society.
Businesses, in particular small firms, have complained of being starved of finance since the start of the financial crisis. Increased lending, they say, is what's needed to really get the recovery going. The Bank of England has been monitoring the loan targets and whether funds are being made available to businesses and have published quarterly assessments.
Ajay Bhalla, Professor of Global Innovation Management (http://bunhill.city.ac.uk/
“Intermittent messages from policy makers promising support and a half-hearted approach by banks to lending to SMEs is doing little to help the UK’s declining population of SMEs. Successive governments failed to provide adequate support to UK manufacturing and now we see SMEs under attack. Today’s news that banks are falling short of targets to lend under the Project Merlin agreement is symptomatic of the uphill task Britain faces in injecting and sustaining entrepreneurship. Britain has already sleep-walked into an economy with two types of businesses: Tesco and financial services. CEOs of large firms not only have access to alternative financing options when faced with a liquidity crunch, but also a hotline to ministers. British SMEs have little in the way of such luxuries. If Britain is serious about injecting competitiveness into its economy, it has to get serious about implementing policies which will help create thriving Mittelstand in every region of Britain.”
To speak to Prof Bhalla please contact Miranda Thomas, PR and Communications Manager at Cass Business School. Prof Bhalla teaches PhD students (http://www.cass.city.ac.uk/
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