So, Nationwide is not about to storm into the market for lending to small and medium-sized businesses (SMEs). It's a case of 2014, probably; and, even then, slowly. We can only speculate whether the argy-bargy with the Bank of England's Prudential Regulation Authority over leverage ratios influenced the building society's thinking on timing. What is clear, though, is that the government had high hopes that Nationwide, and indeed the Co-op Bank, would provide stiffer competition to the big banks in business lending. But ministers were being too naive. They had overlooked Co-op Bank's fundamental weaknesses, now horribly revealed. And Nationwide, albeit a much stronger institution, was always likely to prefer a softly-softly approach.
If the government wanted to breathe more life into the SME lending market, it should have taken responsibility itself for creating more competition.
