LONDON (Reuters) - Britain's biggest banks have agreed to release data showing how much they lend at a local level, the government said, enabling it to see how banks are serving the wider economy and in what areas of Britain there is a lack of lending.
The Treasury said seven of the country's largest lenders, which together account for around 80 percent of all loans, will from next year publish how much they lend to businesses and individuals in 10,000 localities within the UK.
"It is a major step forward in terms of transparency and should encourage competition by helping smaller lenders to identify gaps in the market," Danny Alexander, Chief Secretary to the Treasury, said on Wednesday.
Britain is keen to encourage new lenders to step in with established banks focused on shrinking their balance sheets and building up capital reserves while the government's flagship 'Funding for Lending' scheme has so far failed to achieve its objective with recent data showing a decline in net lending.
Royal Bank of Scotland, Lloyds Banking GroupL>, HSBC, Barclays, Santander UK, Nationwide, and Yorkshire and Clydesdale Banks will provide the data, which will be published by the British Bankers Association and the Council of Mortgage Lenders on a quarterly basis. It will record loans and overdrafts to small businesses, residential mortgages and unsecured personal loans.
On Monday the British Bankers Association released lending data for 120 regions within the UK. It showed total borrowing by small businesses in Britain stood at 100 billion pounds at the end of last year and that businesses' deposits exceeded their borrowing in all regions except Wales and the southwest of England.
Reporting by Matt Scuffham; Editing by Greg Mahlich