HM Treasury discussion paper on non-bank lending - ACT response

HM Treasury's paper promotes discussion on non bank lending channels for companies and seeks to gather information, particularly exploring:

• potential barriers to the use of non-bank lending channels by large and upper mid-sized firms;
• the scope for reducing these barriers so as to facilitate a more diversified funding base; and
• whether there are ways for non-bank investors to invest more effectively in corporate debt.

The ACT welcomes the Treasury's initiative and discusses a multitude of small steps which would help promote the availability of debt capital to firms. Many of the obstacles to greater use of non-bank finance are, however, in habitual behaviours and patterns of thinking and often education and development of standards will be more helpful than extensive legislative programmes.

More generally, we think that many of the issues raised for large and upper mid-sized firms will have application in respect of smaller firms, but a lot of additional considerations arise in respect of that sector which needs separate consideration.