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The Merlin Agreement was about setting stretching lending targets to the banks to make sure that they make available the credit that businesses need to grow. This is particularly important for small businesses, and this is why we have insisted on individual figures for SMEs.
The Bank of England reported the banks' first quarter performance against the Merlin Agreement on
The agreement with the banks was made mid-way through the first quarter, and this might have impacted on the figures. But it is too early to properly assess the impact of the Merlin Agreement on small businesses' ability to access bank finance.
We will therefore continue to monitor very closely whether the banks are making sufficient credit available to small firms before passing a definitive judgement on the impact of the agreement on small businesses.
The Government are clear that, if the banks fail to meet their commitments, the Government reserves the right to return to the matter and take further measures.