Funding for lending 'leaves big questions unanswered'

The Engineering Employers Federation (EEF) has suggested the government has still left some big questions unanswered regarding the new funding for lending initiative.

Chancellor of the exchequer George Osborne and governor of the Bank of England Sir Mervyn King revealed that taxpayer funding will be provided to banks.

This is intended to extend to a period of several years and is hoped to encourage banks to increase the levels of finance they make available.

Director of policy at the EEF Steve Radley said the impact the scheme will have remains uncertain.

He also expressed concern with the risks associated with the scheme and asked how it will be monitored.

"The government needs to be similarly aggressive on tackling the structural problems in the financial sector - including a lack of competition between banks and a lack of options for accessing finance," Mr Radley commented, adding that he welcomes the attempt to improve lending conditions in general.