Talks aimed at getting Britain's banks to agree targets over lending and pay have stalled, Sky sources say. Skip related content
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It had been thought agreement on the "Merlin project" was likely to be reached early this week, but Sky's City editor Mark Kleinman believes that will not now happen.
The scheme is an attempt by the Government to get lenders to agree to targets over borrowing and pay disclosure in attempt to heal the rift caused by the financial meltdown and subsequent public anger.
The delays come just a day after the man responsible for their reform, Sir John Vickers, referred to their "spectacular" failure to minimise risk.
One of the stumbling blocks is thought to be David Cameron's vision for a "Big Society Bank" which would provide funding for charities and voluntary groups.
Sources have told Kleinman that financial contributions from Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland (RBS) are now likely to fall hundreds of millions of pounds short of the £1bn-£1.5bn target that was being discussed by the banks and ministers last year.
The most crucial element of Merlin for the banks to agree with ministers is the overall lending target to which the five biggest lenders will sign up.
This is again expected to fall short of the Government's original insistence on £200bn of new lending and for small business lending.
The final number is understood to be more like £65bn-£75bn.
The talks are also likely to have been pushed back as key political figures David Cameron, and George Osborne will be attending the World Economic Forum in Davos towards the end of next week.
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