The six largest banks of the UK have formed a task force to solve the lending issues for small and medium sized businesses. This is a welcomed development for the economy, but what about the personal loans for mortgage and remortgage purposes?

Stephen Green will lead the task force. He is chairman of the HSBC and British Banker’s Association.

The recent interim reports of local banks has been very revealing. The banks at mid-point of the year are doing quite well. This makes it possible for them to be doing what banks do best - lend money. For months the small and medium sized businesses have been screaming for it with not very good results. On one hand, the businesses need it to keep recovery moving forward. On the other hand, banks have lending criteria to uphold and they are very top heavy with mortgage and remortgage loans to satisfy.

The task force seeks to solve the problem of businesses not being able to lend more money. This is necessary for growth to continue, but at what expense to the mortgage loan market?

With the Bank of England continuing to make interest rates very attractive by keeping the base rate so low, should the banks slow down on lending for the housing market?

These are tough questions that require solid answers for both sectors to grow and recovery to be possible. The task force has a lot on their plate for the coming weeks to ponder and make major decisions about.

The task force is represented by Lloyd’s Group, RBS Barclays, HSBC, Santander and Standard Chartered. Along with the barriers of lending the bans are dealing with, they will also analyze the banks’ access to funding.