More small and medium-sized businesses (SMEs) in Scotland are successfully applying for finance, according to a Scottish government survey.
The SME Access to Finance report found 87% of firms were able to access all of the money they were seeking - up from 79% in the last survey in 2010.
There was also a fall in the number of outright rejections by banks.
But there was a marginal rise in the proportion of firms who secured none of the money they were seeking.
The Scottish government said the survey provided "some evidence of an easing in supply constraints".
The survey indicated a rise in demand for finance across nearly all sectors, with 9% of all firms seeking new and/or additional lending and a third of all firms looking to renew existing facilities.
Manufacturing and construction were among the sectors with the highest application rejection rate.
The latest survey suggested demand for finance had remained broadly stable since the last survey in 2010, with 45% of firms looking for credit over a three-year period to 2012. That compared to a figure of 43% in the three years to 2010.
Finance Secretary John Swinney said small and medium-sized business were "the lifeblood of the Scottish economy".
He continued: "Collectively they employ over one million people and account for around 54% of total employees in Scotland's private sector.
"Any evidence of increased lending to SMEs is good news for our economy and will be a key element in building a sustained recovery."
Mr Swinney said lending criteria were stricter now than in the past but the latest figures showed that accessing finance was still possible.
"Businesses must present a robust, commercially sound proposition," he said.
"Companies can come to our agencies or Business Gateway for advice and information before they even approach the banks and I would urge them to make use of all of the services available."
Lending callEarlier this year, Mr Swinney urged the UK government to do more to accelerate bank lending for SMEs.
His call followed UK Treasury data indicating Scottish SMEs received less than 5% of lending from a project set up by the UK government and five major banks.
Under Project Merlin, banks committed to making £190bn of new credit available in 2011.
Scottish SMEs took 4.8% of gross lending, but accounted for 6.4% of UK SMEs.
In March, the UK government introduced a £20bn National Loan Guarantee Scheme, aimed at boosting bank lending to SMEs.
Doris Money, what bank called Farepak savers' cash as thousands who lost out in scandal are cheated out of justice - Daily Mail
- When firm went into administration cash was used towards repaying the bank's 31million loan
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Anger: Thousands of Farepak Christmas hamper customers were cheated out of justice yesterday
Thousands of customers who lost money in the Farepak Christmas hamper firm scandal were cheated out of justice yesterday.
As a high-profile court case against the directors of the failed firm collapsed, it emerged that bankers had referred to customers' cash as 'Doris money'.
It was also revealed that bankers, HBOS, twice refused to protect 4million saved by customers, mainly on low incomes, to buy a hamper.
The Insolvency Service abandoned its five-year Farepak investigation after extraordinary new evidence showed that HBOS turned down the option of placing the money in a trust.
This meant that when the firm collapsed into administration in 2006 the cash was used towards repaying the bank's 31million loan rather than refunded to Farepak's vulnerable customers, many of them elderly.
More than 150,000 customers who had paid regular instalments for a Christmas hamper were left on average 400 out of pocket and offered just 15p in the pound.
Hugely embarrassing emails from senior bankers at HBOS, which is now owned by Lloyds Banking Group, showed they referred to the cash from Farepak's vulnerable customers as 'Doris money'.
The new evidence will heap further pressure on Peter Cummings, known as the banker to the stars of the financial world, who was handed a 'warning notice' and punitive fine by the Financial Services Authority in April as part of its investigation into HBOS.
It has been reported that Mr Cummings, who is challenging the FSA's rebuke, had been the 'ultimate arbiter' of what happened with Farepak.
This is the second collapse of a case brought by a government department this week – the Insolvency Service falls under the responsibility of the Department of Business.
Rich pickings: When the firm went into administration in 2006 the cash was used towards repaying the bank's 31million loan not vulnerable customers
On Monday the Serious Fraud Office dropped its investigation into property tycoon Vincent Tchenguiz.
On Farepak, lawyers representing the Insolvency Service had asked Mr Justice Peter Smith in the High Court to disqualify its former bosses from being company directors, accusing them of 'unfit conduct'.
The former bosses, including Sir Clive Thompson, an ex-president of the Confederation of British Industry, contested the disqualification applications.
But yesterday the government's companies watchdog abandoned its bid to penalise the directors after the new evidence emerged that included the fact that they had twice tried to protect the cash of customers.
Business Secretary Vince Cable said he felt 'huge' sympathy for 'those who lost out' and would reflect on the decision by the Insolvency Service.
A spokesman for Lloyds Banking Group said: 'As this matter is subject to ongoing legal proceedings, it would be inappropriate to comment.
'We have assisted the relevant authorities at all times during their investigation of European Home Retail plc and Farepak and the conduct of their directors.'
Highlights: Euro zone finance ministers' comments - msnbc.com
LUXEMBOURG (Reuters) - Euro zone finance ministers and officials meet on Thursday to discuss a bailout for Spanish banks and the way ahead for Greece's emergency lending program.
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Following are comments from ministers and officials ahead of the regular talks:
FRENCH FINANCE MINISTER PIERRE MOSCOVICI:
ON GREECE:
"I will start by saying that I'm delighted by the fact that the Greek people have opted for a pro-euro government. That's the right way to go.
"We know that it means that Greece will have to respect its commitments. But it also means that Europe has to be sensitive to the feelings of the Greek people, and take measures in order to help the country achieve growth. Efforts must be made, but at the same time we have to create conditions for hope. That's what the euro must be about."
ASKED IF SPAIN WILL MAKE A FORMAL REQUEST AT THE MEETING FOR SUPPORT FOR ITS BANKS:
"That's for Spain to determine itself. Now they have some decisions to take - and they will be taken. The plan we decided on some 15 days ago is robust and sufficient according to all the analysis we have.
"The mechanisms exist, and I am confident in Spain's ability to make the necessary reforms, and I am confident in the European Union's capacity to respond to the difficulties in the banking sector.
"More broadly, what we need to do in the days ahead is to provide a joint, stable and lasting framework for the euro zone."
ON SITUATION IN FRANCE:
"I am very confident in my country. I will have the opportunity (at the Euro group) to present our public finances strategy and that our commitments will be met... We will be at 4.5 percent (deficit) in 2012 and we will work on our strategy for 2013 to reach 3 percent (deficit). France has all the resources to both to carry out growth policies and to respect our public finance commitments."
GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE
ASKED ABOUT POSSIBILITY OF EFSF BAILOUT FUND BUYING BONDS ON SECONDARY MARKET:
"The legal situation for the European rescue mechanism, the EFSF - the ESM isn't in force yet - is set out in the treaty.
"Under certain circumstances there is a possibility to operate on the secondary market. That's known, that's sorted and all this speculation can be surprising as it's all set out clearly in the treaties: following a country's request and the agreement of an adjustment program.
"We're flexible on the specific financing instruments, such as with the banking recapitalization in Spain. There are different types of instruments that we can use efficiently, such as with leveraging and such, but we don't need continuously new considerations in public as if we hadn't made precise agreements already."
ASKED ABOUT HOW TO END MARKET TURMOIL:
"Speculate less, but work precisely, implement what has been decided instead of creating expectations that are completely unrealistic, but on the other hand implement what has been agreed.
"That's also what I told my colleagues in the G20 framework in Los Cabos again: Germany, for instance, has largely fulfilled its commitments according to IMF reports, the OECD and the European Commission.
"If everyone fulfils their commitments, the problems will soon be solved. And if there is less speculation, including in the media, the financial markets won't constantly be insecure, because how are investors meant to differentiate if you as media keep publishing groundless rumors."
ON GERMAN CONSTITUTIONAL COURT SAYING IT NEEDED TIME TO DECIDE ON LEGALITY OF ESM PERMANENT BAILOUT FUND:
"I don't believe it is smart if the organs of the constitution communicate with each other in public and I believe it's even less smart if the government makes comments on this."
(Reporting by Annika Breidthardt, Charlie Dunmore and Robin Emmott, via Brussels newsroom)
(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp
Greek finance job goes to civil servant - Financial Times
June 20, 2012 7:28 pm
WRAPUP 3-Spain to seek bank aid as borrowing costs soar - Reuters
* Spanish 5-year borrowing costs at 15-year high
* Audit on banking sector funding needs due later in day
* Euro zone finance ministers to discuss rescue package
* Greece asks for two extra years to deliver cuts
By Paul Day and Jan Strupczewski
MADRID/LUXEMBOURG, June 21 (Reuters) - Spain's medium-term borrowing costs spiralled to a euro-era record at an auction on Thursday, before an independent audit was due to reveal the size of a capital hole in Spanish banks which will be filled by a euro zone bailout.
Euro zone finance ministers will discuss how to channel up to 100 billion euros ($126 billion) in rescue loans to Spanish lenders weighed down by bad loans from a burst property bubble. Many in the markets see the package as a mere prelude to a full programme for the Spanish state.
"We have already started working on the design of the aid with the Commission, the European Central Bank and the International Monetary Fund," Spanish Economy Minister Luis de Guindos told reporters as he arrived for the ministerial talks in Luxembourg. "We will present the request in the next few days."
Spain's financial plight is centre stage a week before a European Union summit tackles long-term plans for closer fiscal and banking union in an effort to strengthen the euro's foundations, after bailouts for Greece, Ireland and Portugal failed to end a 2-1/2-year old debt crisis.
To pave the way, the leaders of Germany, Italy, France and Spain will meet in Rome on Friday.
Madrid sold 2.2 billion euros in medium-term bonds and attracted strong demand. But yields on 5-year paper rose to a 15-year high of 6.07 percent, a level regarded by analysts as unaffordable for any prolonged period.
The runaway Spanish yields contrasted with a French auction in which the yield on 5-year benchmark paper hit an all-time low of 1.43 percent.
"The first worry is can they (Spain) fund from the markets? They raised 2.2 billion versus a 2 billion target, so they can raise the money," said Achilleas Georgolopoulos, a strategist at Lloyds in London.
"Then the (question is), are the yields threatening for the medium term? And yes, clearly they are much higher than the previous auction ... But still they can continue for a few months to fund at these levels."
Two independent auditors are due to deliver a report to the Spanish government on the recapitalisation needs of the banking sector following last month's sudden nationalisation of Bankia, the fourth biggest lender.
De Guindos will present the findings to his euro zone colleagues in Luxembourg. Banking sources believe the report will say the lenders need to raise a further 60-70 billion euros.
"NO DEBT MUTUALISATION"
The finance ministers will discuss which of the euro zone's rescue funds - the temporary European Financial Stability Fund or the permanent European Stability Mechanism - will lend Spain the money. This matters to investors because ESM loans would be senior to other Spanish borrowing, meaning private bondholders would face first losses in any debt writedown.
The ministers are also expected to ponder the next steps with Greece, following the formation of a coalition of mainstream parties committed to the country's 130 billion euro EU/IMF bailout but determined to renegotiate some of the terms.
Athens will ask lenders for two more years to hit fiscal targets and an extension to unemployment benefits as it seeks to soften the punishing terms of the bailout saving the country from bankruptcy, a party official said.
Greek officials have said this would entail an extra 16-20 billion euros in foreign funding. It sets up a showdown with Greece's euro zone partners, in particular paymaster Germany, which have offered modifications but no radical re-write of the conditions attached to the lifeline agreed in March.
"We can always discuss conditions of the loan. But let us not forget one thing: This is not one-way development aid," Luxembourg Finance Minister Luc Frieden told Reuters Insider television.
RESCUE FUND TO THE RESCUE?
The German government and opposition reached a deal that will allow parliament to approve the euro zone's permanent bailout scheme next week, but Germany's top court may delay the rescue fund's start date scheduled for July 1, saying it needed time to study the treaty.
The ESM cannot go into effect without approval by Europe's biggest economy. Ratification also requires the signature of the president and a nod from the constitutional court in Karlsruhe.
The parliamentary floor leader of Merkel's conservatives appeared to dash French and southern European hopes of nudging Berlin towards common euro area debt issuance, saying there would be no mutualisation of debt in Europe.
The euro zone finance ministers may consider a suggestion by Italian Prime Minister Mario Monti, made on the sidelines of this week's G20 summit, to use the euro zone's rescue funds to buy the bonds of Spain and Italy in the secondary market to bring down their borrowing costs.
Monti hosts Spanish premier Mariano Rajoy, German Chancellor Angela Merkel and French President Francois Hollande in Rome on Friday and is also expected to raise the idea there.
Merkel has played down the proposal, which investors said might be counter-productive unless the ECB stepped in decisively in support.
Any cash injection would come with strings attached, equivalent to the sort of bailout programmes that Italy and Spain are trying to avoid because of the stigma attached.
Given the limited capacity of the temporary EFSF and planned permanent ESM rescue funds, with at most 500 billion euros available, a senior EU source said such intervention would make sense only if the ESM had a banking licence enabling it to borrow from the ECB. Germany has so far opposed that idea.
"Right now we have no requests to buy via the EFSF/ESM, Spanish or Italian bonds," Frieden said.
But he added: "We have funds available if necessary to help those countries in need ... We will do whatever is necessary to make sure that this zone, which is in trouble, will remain in the medium and long term a stable monetary union."
Why did they do it? Because they were allowed to and more or less knew nothing would happen. Does anyone actually think these people don't think out what could happen to them before they do anything a bit 'iffy' and take expert advise on such?
- PC, Liverpool, 21/6/2012 15:24
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