The message to resellers concerned about the liquidity ofbusiness banking facilities after the collapse of Lehman Brothers and today’srescue of Merrill Lynch, is not to panic.
In a statement made to the BBC, Angela Knight, chiefexecutive of the British Bankers Association (BBA), said that Lehman Brotherswas a small player in the UK and British banks had largely recapitalised in thewake of last year’s Northern Rock failure.
Knight said the BBA knew of no British banks in a similarsituation.
Last week, the association released figures showing thatlending to UK SMEs was actually up over the 12 months to June 2008, adding tobusiness confidence.
Based on a survey of banks including Barclays, HSBC andRBOS, the BBA revealed that term lending grew 11% to £44bn, while totaldeposits were up 6% to £54.5bn. Over the course of the year, 543,000 new SMEbanking relationships were established.
“These figures reflect the economic climate for the smallbusiness sector, with borrowing continuing to expand, but deposit growthslowing,” said BBA statistics director David Dooks.
“In the face of weaker trading conditions, businesses areusing all the cash they can generate, while those seeking finance are generallytaking fixed-rate structured loans or using previously agreed facilities,” headded.
Meanwhile, technology stocks were among those that took abattering on Monday after Lehman Brothers announced it was filing for Chapter11 on Sunday night, although no publicly-listed tech firms have issued anystatements on the crisis as yet.