David Prosser: An inquiry into a problem the banks say does not exist

Outlook Stephen Green, the cerebral chairman of HSBC, chose an odd moment to launch his taskforce on bank lending into the public consciousness yesterday. By publishing a lengthy list of issues worthy of investigation in the hope that more can be done to get sufficient credit to businesses that are viable, he rather undermined the insistence of his fellow bank bosses that enough is already being done. Interesting timing since the chief executive of each of Britain's biggest banks stood up last week, in the style of those tobacco bosses who used to decry all suggestions that their products killed people, to insist that everyone deserving of credit was getting it.

The topics that Mr Green's taskforce will probe will not come as much of a surprise to anyone with a passing familiarity with the banking sector's travails. Clearly, the continuing logjam in the securitisation markets is acting as a brake on the ability of the banks to lend more, because it leaves existing lending stuck on their balance sheets. With further funding constraints to come and continuing pressure on capital, there is little room for an expansion of credit.

Similarly, the extension of government schemes such as the enterprise finance guarantee, something else Mr Green wants to talk about, probably would make it easier for businesses to obtain credit in certain circumstances. But if the banks choose to respond to government accusations that they are refusing to lend by requesting that more lending is underwritten by the taxpayer, it is not going to go down terribly well.

In truth, this taskforce, which is promoted by the British Bankers' Association, has a real feeling of tokenism. Last week, the banks said they were lending, but the criticism didn't stop. So now they feel obliged to have an inquiry into a problem they don't really acknowledge exists. Its findings, due in October, will be an interesting exercise in presenting possible improvements to a market they say is working perfectly well already.

One matter the taskforce won't study, by the way, is the issue that most dispassionate observers think is the really crucial one: the lack of competition in the banking sector. It might be asking rather too much of an industry to spend time and money looking at ways to promote new entrants, but that is what is really needed here.