The Bank will publish on this page quarterly data showing, for each group participating in the FLS, the amount borrowed from the Bank, the net quarterly flows of lending to UK households and firms, and the stock of loans as at 30 June 2012. The provisional publication dates are available here. The Bank will also update the list of participating groups on a monthly basis with the names and Base Stocks of groups that have signed up to the FLS.
The FLS aims to encourage more lending to the UK economy than would have been the case in the absence of the scheme. At an aggregate level, prior to the launch of the FLS in July 2012, Bank staff judged that UK bank lending was more likely to decline than increase over the subsequent 18 months. Some banks are reducing parts of their lending activities, consistent with the continued adjustment of their business models in the wake of the financial crisis, or responding to State Aid conditions. While such adjustments should continue, the FLS should encourage those banks that were planning to reduce their lending to households and companies in aggregate to expand their core lending such that the total is cut back by less than would otherwise have been the case.
The FLS incentivises banks to boost their lending by reducing bank funding costs. This allows banks to reduce the price of new loans and increase their net lending. But it takes time for reduced funding costs to feed through to lending volumes, given the typical lags involved in the loan application, approval and drawdown process. For more information on the transmission mechanism of the FLS, see page 14 of the November 2012 Inflation Report.
FLS usage and lending data1, 2
* This group has chosen to activate the option to include lending related to non-bank credit providers from Q2 2013. For further detail please see the Market Notice available here.
1 More detailed data are available here. Note that data may not sum to the total due to rounding. Data may be subject to revisions.
2 These data are subject to final audit.
3 The FLS measure of lending covers drawn sterling loans to households and private non-financial corporations (PNFCs) by the FLS Group, which includes all UK resident monetary financial institutions and related specialist mortgage lenders within a group. For further details of the FLS measure of lending, refer to the Guidance Notes available here.
The Bank publishes an aggregate measure of lending to UK-resident households and PNFCs by all UK-resident monetary financial institutions and related specialist mortgage lenders using the same definitions as the FLS measure. This is available via the Bank’s Statistical Interactive Database, updated monthly on the same day as the Bankstats (Monetary & Financial Statistics) publication.