to me.

What is to prevent the banks from playing derivative roulette with the money?

How much of it will be spent in one of Adelson's casinos?

The banks as they now work are a bottomless pit. What a wasteful scheme.

but the B of E and the Coalition government don't want to use that particular turn of phrase.

Interestingly, read some of the comments; the Telegraph is traditionally a Conservative newspaper, and many of the comments I've been reading are generally viewing this move quite negatively.

While it is true on the one hand that many banks in the Eurozone and the U.K. are undercapitalized, by the same token there's too many of them; it's a banking glut, and now there's a whole mass of zombie banks.

Even worse, the recent E.U. bailout (or, loan as the Spanish government refers to it as) of the Spanish banking sector will do nothing. The Spanish banks are grossly overleveraged with empty properties that are declining in value, and which they refuse to sell for anything less than the prices which were commonplace during the height of their property bubble. Sure, they'll sell you a house, but at full mortgage, and at full price, not taking into account the newly depreciated value. That's why the Spanish banks are stuck with tons of empty property developments on their books.

our differnt newspapers are all quoting different figures for this. Its somewhere between 100 and 140.

Its actully to cover the event of a serious issue in Europe and may not be put to immediate use.

is hedging against the possibility of a Greek Eurozone exit.

Interestingly, Greek bank stocks surged today, 20% actually, on rumors that the pro-austerity parties are likely to win just enough to form an effective government. Of course, polling and releasing poll results are banned under Greek law for two weeks prior to an election, so it's possible some Greek think-tank, or whatnot may have a commissioned a private poll to see what's up.

Go to BBC News which provides a good explanation of intended use constraints.

site and here's the link for the benefit of others: http://www.bbc.co.uk/news/business-18448636

I confess to remaining somewhat skeptical of lending even more money to the world's largest casino, aka; the City.

From the article on BBC, Rather than further QE to stimulate the economy, the Bank will now offer cheap loans to banks on the basis that they increase lending.

"The Bank and the Treasury are working together on a 'funding for lending' scheme that would provide funding to banks for an extended period of several years, at rates below current market rates and linked to the performance of banks in sustaining or expanding their lending to the UK non-financial sector during the present period of heightened uncertainty."

The second measure he said the Bank would be introducing was a scheme outlined in December last year - called the Extended Collateral Term Repo Facility - to address a shortage of liquidity in the banking sector.

This will make it easier and cheaper for banks to borrow at least £5bn every month to cover any shortfalls in cash.

We shall see whether this latest idea works out. Most of the comments I've been reading, from pretty much across the political spectrum, are trending from dubious to negative to occasional outright hostility.

I'm back on the desk top now but its goodnight from me.

Do they think start-up small businesses will make enough profit to pay these loans back in a depressed economy? Or is this just a way to sucker less affluent people into more debt?

If they can't pay them back, will they then kick them in the teeth later by austerity measures destroying the social safety net so they have nothing to fall back on, and lose their homes to this?

It seems like the promoters of failed GOP policies here are going for the kill on fresh targets in the UK.

as to the likely level of demand for those funds in form of loans to consumers and small businesses for whom they are intended.

btw - some small businesses need such funds in the form of overdrafts to help cashflow.

is that they're trying to essentially get consumers and businesses to take on more personal debt.

Right now, both consumers and businesses, not just in the U.K., but here in Europe proper and I would imagine in the USA as well, are trying to pay off their debts and avoid taking on anymore new debt unless they absolutely have to.

The problem isn't so much an issue of the banks not having money to lend; rather it's that there's not a lot for demand for loans right now. Consumer confidence in the U.K. and vast swathes of Europe is pretty much shot to hell at the moment, and if things go badly in Greece (ie, a "disorderly exit" scenario), I really don't think people are going to go running out into the street to buy themselves some useless crap they genuinely don't need.

A friend of mine in Greece, a former student, e-mailed me and said in brief that Greece is a powderkeg; it's an explosion in search of a spark. I told her she was more than welcome to come stay with me and my girlfriend if the SHTF, and she replied she'll be seriously thinking about it (her folks live in England, but she doesn't get along with them too well). She's making plans to get the hell out, and she's genuinely afraid of what's going to happen. She's honestly talking about the possibility of a civil war.

Simply put, you can throw money out of a hovering helicopter, but in uncertain times, people are far more likely to take it home and stuff it under their mattress than go out and buy a Rolex.