No surprise the banks are failing to increase lending to small companies despite the much heralded "Project Merlin" agreed with the UK government back in February. For the first quarter, the big five high street banks lent a total of £16.8bn to small companies but to match their intentions that figure needed to be £19bn.
When times are tough, a shortfall of £2.2bn is a heck of a big deal. Of course, the banks did not agree to meet any specific target, merely announcing their "intention" for gross new lending to be higher than in 2010.
If things carry on, the only thing magical about the project will be that it made the threat of government action against the banks disappear in return for very little.