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Regulatory and Banking Reform

My hon. Friend makes an important point. The Chancellor was very clear last night. Yes, we do want the banks to deleverage, but one way of doing that is to reduce their exposure to other banks and to the financial sector. That will give them the capacity within their capital, as they build up their capital levels, to continue to lend to small and medium-sized enterprises and larger corporates. That is one of the reasons why we set out to establish a commitment from the banks to lend up to £190 billion this year to businesses of all sizes, including £76 billion to SMEs. I think we have the right approach. We want a stronger, more sustainable banking system but we need one that will lend to small and larger businesses. Project Merlin helps us to achieve the right balance. We need the banks to deliver on that commitment.