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LONDON, April 16 (Reuters) - Bank credit is now more popularwith big companies in Britain than at any point in the past fiveyears, a survey showed on Tuesday, suggesting an easing in whatmany see as a major brake on the economy.
The Bank of England and politicians say a lack of banklending, especially for smaller firms, is part of the reason forthe country's very slow recovery from the financial crisis.
That problem seems to be fading, at least for businessheavyweights.
Banks are an attractive source of credit according to 67percent of chief financial officers polled by professionalservices firm Deloitte. That is the highest level since thequarterly survey started in the third quarter of 2007.
"Reduced stress in financial markets, especially in the euroarea, has delivered improvements in credit conditions for big UKcorporates," said Ian Stewart, chief economist at Deloitte.
"It is a measure of the change that CFOs now rate bankborrowing as offering a more attractive form of finance than atany time since the start of the financial crisis."
Lower costs and improved availability of credit have ensuredthat raising debt through bond issuance or bank borrowingremains the most attractive form of financing for Deloitte'spanel of large corporates, the report said.
Deloitte polled 120 senior financial executives at majorcompanies in Britain between March 14 and 28.
If smaller firms had been polled, the findings might havebeen different.
Government-commissioned research unveiled on Friday foundthat low-risk small businesses seemed to have borne the brunt ofbanks' "credit rationing", which took place through higheroverdraft interest rates and outright rejection of loans.
The report by the National Institute of Economic and SocialResearch, Britain's leading macroeconomic think tank, said thecountry's banks were less willing than before the financialcrisis to take the risk of lending to small businesses.
Fears that firms were being starved of credit prompted thegovernment and central bank last year to set up the Funding forLending Scheme, which offers banks cheap finance if theymaintain or increase lending to households and businesses.
But banks say that weak lending growth is largely due tofirms' unwillingness to invest in an uncertain economic climate,not a reluctance to lend on their part.
