Corporate banks 'should be able to cope' without liquidity support

Corporate banks should not be troubled by the withdrawal of the Bank of England Special Liquidity Scheme, according to one member of the Monetary Policy Committee.

Executive director of markets Paul Fisher notes the system was put in place to ensure corporate banks and credit providers were in a position to lend to smaller organisations and thereby assist Britain's economic recovery.

The wealth management expert explains: "After three years of large-scale liquidity support the Bank expects each institution to be in a position to fund itself through normal market mechanisms."

Bilateral discussions have been held with current beneficiaries and officials claim to be satisfied "credible funding plans" are in place to ease the transition to a more normal banking credit system.

With the collapse of industry giants such as Lehman Brothers, governments in the UK and elsewhere were forced to step in to prop up 'too big to fail' institutions, but yesterday's (September 30th) speech seems a firm step towards ensuring such companies are able to function independent of state support.  ADNFCR-2318-ID-800094243-ADNFCR