UK Parliament moves to make banks disclose credit to small business

The Guardian reports a small step on the way to making banks provide ultra transparency and disclose on an ongoing basis their current global asset, liability and off-balance sheet exposure details.

Specifically, the UK Parliament is looking at requiring banks to disclose the amount of credit they offer by post code.

Liberal Democrat peers are attempting to force banks to disclose the amount of credit they offer to small businesses by tabling an amendment to the financial services bill. 

Supporters of the amendment, due to be debated on Monday, include the bishop of Durham, Justin Welby, appointed archbishop of Canterbury last week. 

The Lib Dems have convinced the government to give the Financial Conduct Authority spun out of the Financial Services Authority, a mandate to scrutinise whether consumers get fair access to banking services. 

Led by Lady Kramer and Lord Sharkey, the peers are tabling an amendment that would require banks to publish figures for quarterly lending to small businesses on a postcode-by-postcode basis. The idea is to enable the public to see which banks are lending and which areas benefit from loans that are granted....

One can expect the banks and their lobbyists to push back vigorously against this small request.  It is vitally important to protecting opacity that the banks do not let the public see what they are doing.

Once the public can see how much they are lending, there is no reason to stop there and not ask the question of who are they lending to so market participants can independently confirm the figures.

You can see how a simple tug on the veil of opacity unravels the whole tapestry and with it the banks ability to profit from activities like manipulating the Libor interest rate.

Lord Oakeshott who resigned as a Lib Dem Treasury spokesman in the Lords over the Project Merlin deal that attempted to boost bank lending, said: "Lib Dems in the Lords are determined to make the banks come clean. ...

Bankers know that opacity is under attack.