"SMEs are a vital driver of growth in the UK," said Vivienne Dews, the chief executive of the OFT. "They need access to banking services and loans which meet their needs.

"Our work suggests there may be competition concerns in this sector. Further action will follow if concerns in these areas are not addressed," she added.

John Longworth, director general of the British Chambers of Commerce, said of the watchdog's findings: "Greater competition in the business banking market is only part of the story of fixing Britain’s broken business finance system. More must be done to provide growth capital to young and fast-growing firms who are often perceived to be too high risk.

"That means broadening the role of equity and bond issues in business finance, but it also means delivering a British Business Bank that is sufficiently capitalized and has the capability to lend directly to promising high-growth businesses"

The OFT also announced that the Competition and Markets Authority will take over the study as part of a wider probe into retail banking. The Financial Conduct Authority will also contribute to the research.

MORE HOT AIR .... basic nothings...

BRUXELLES - "We affirm that it is imperative to break the vicious circle between banks and sovereigns,” said a summit statement.

Relief for Spain was accompanied by a pledge to begin purchases of Italian bonds using EU bailout funds to reduce Italy’s borrowing costs with a lighter set of conditions, based on meeting Brussels fiscal targets rather than intrusive IMF oversight.

A promise was also made to “examine the situation of the Irish financial sector” offering possible relief to Ireland by relieving the government balance sheet debt burden.

The Spanish bank bailout, to be agreed on 9 July, will initially use the euro’s European Financial Stability Facility (EFSF) before it is transferred into a new permanent fund later this year.

When the transfer takes place to the European Stability Mechanism the new loans will not be given seniority, giving extra security to Spain’s creditors.

After the ECB takes over eurozone banking supervision next year then the Spanish bailout will “very rapidly taken off balance sheet” and directly loaned to banks reducing Spain’s debt burden and borrowing costs....

More reaction to the summit: Ratings agency, Fitch, said the summit eases near-term pressure on euro sovereign ratings. Here's a taster of Fitch's statement: Our initial assessment of the summit of EU leaders held in Brussels this week is that it has exceeded expectations, although these were low, and marks a positive step that eases near-term pressure on eurozone sovereign ratings. ...Eurozone leaders' decision to create a 'single supervisory mechanism' for banks is an important step towards ensuring the long-run viability of the euro. Once such a mechanism has been created, the soon to be established European Stability Mechanism (ESM) could recapitalise banks directly. In Fitch's opinion, the creation of a single pan-eurozone bank supervisor with the power to intervene and, if necessary, directly capitalise banks could greatly improve the functioning of Economic and Monetary Union (EMU). The International Monetary Fund has commented on the decisions made at last night's summit. It "strongly welcomes" the decisions by the European Council, saying the steps will help to break the feedback loop between banks and sovereigns. It adds the decisions are "the right steps" towards completing monetary union. The Bundestag's lower house has also approved the ESM bailout fund. Reuters says that the lower house of the Bundestag has approved the fiscal compact as well .

It's your money they're giving away

The three-year loans, the longest maturity ever offered by the ECB, are the eurozone central bank's latest attempt to ease the region's debt crisis. The ECB hopes the limit-free, ultra-cheap and ultra-long funding will bolster confidence in banks, ease the threat of a credit crunch and encourage banks to buy Italian and Spanish government debt, thereby pushing down the countries' borrowing costs. “While this doesn’t fix the long-term structural issues in the EU, it may ensure a rally for risky assets into the new year,” said Jeremy Cook, chief economist at foreign exchange firm World First. "It looks like Christmas has come early for the European banking sector - however, in the place of Santa Claus, with his big white beard and jolly smile, the benefactor looked a lot like Mario Draghi." Today, banks switched €45.7bn out of one-year loans taken from the ECB. The impact on overall liquidity levels was also softened after banks scaled down their three-month borrowing from the ECB to €30bn from €140bn and almost halved their intake of one-week loans this week. Europe's banks are now more reliant than ever on central bank funds. French banks have almost quadrupled their intake of ECB money since June to €150bn, while banks in Italy and Spain are each taking more than €100bn. Earlier this week, the ECB said in its semi-annual Financial Stability Review that this dependency could be difficult to cure.

Wake up Europe!!! .... they're doing to you what they've already done to both the US and the UK - giving the Banks all your money with no strings or assumed ownership. Not getting it the first time is bad, but your watching the perennial repeat, for goodness sake. The best you could say is they're giving the banks such a good deal that overcapitalizing themselves is a breeze, but the thing is....... they will overcapitalize no more than they absolutely have to!!!!!! they like leveraging the GDP, your hard work, out of your Government much more than actually doing the graft involved in real Banking.

European Biomass to Power 2011 (13-14 April, Vienna, Austria) will provide the leading platform for companies within the biomass and power industry including EDF, Dong Energy, Wien Energie, RWE, Price BIOstock and Poyry to analyse and identify continuing growth potential in the European market. The event will look at raw material sustainability issues, investment opportunities, case studies from co-firing, pure biomass and biogas power plants as well as the latest conversion and
pre-treatment techniques.
More Info & Registration
Justyna Korfanty
+44 (0) 20 7981 2503