Those losses could far outweigh the small gains they might enjoy from protecting their balance sheets in the short run.8 So lend they have. Businesses have now raised – net of repayments – more than £ from banks since February. More than £ of new lending has occurred through the 100% government guaranteed Bounce Back Loan Scheme. These 1 million loans are vital for many of the smallest businesses to bridge the disruption. But they do not help to finance the cash-flow deficit of medium and large sized companies that I described earlier. Banks have lent £ has been lent to these companies, net of repayments. Within that, there has been £ of lending approved through 55,000 loans under the CBILS scheme; a further £ through 428 loans under the CLBILS scheme. Add to that at least £ of new bond issuance and £ lent through the CCFF and these companies have raised at least £ of new debt. 6  See May 2020 interim Financial Stability Report On 11 March, the FPC reduced the UK countercyclical capital buffer rate to 0% with immediate effect, and set out its expectation that it would maintain this rate for at least 12 months.
By purchasing commercial paper, it offers to provide short-term loans – loans that will need to be paid back – to companies of investment grade standing before the virus disruption. It provides an alternative – backstop – source of finance for larger companies in the event that markets are disrupted. The Scheme has lent £ to 68 companies. More importantly, it has also authorised borrowing limits amounting to £ to 199 companies accounting for nearly 2.3 million jobs. The knowledge that this backstop to funding markets is there removes the need for larger companies to run to the banks to insure themselves against market disruption. By standing ready to lend to larger companies, we have protected the space banks have to lend to the wider population of companies. Financial Response II: Support for bank lending  The package of measures to support bank lending has gone much further than just protecting their capacity to lend. [See slide 4 of accompanying deck]  Banks have been given the funding for new lending. The Term Funding Scheme with additional incentives for SMEs (TFSME), provides 4 year funding for banks, at rates very close to Bank Rate, to match any increase in lending. The scheme provides additional incentives for lending to small and medium sized businesses, with £ of cheap funding for every £ increase in such lending. Crucially, the Government has provided banks with guarantees on new lending. The Coronavirus Business Interruption Loan Schemes guarantee 80% of new lending by banks.