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Commentators give their verdicts on Project Merlin - the lending targets the Treasury has set for banks.

The the deal that has been reached will probably satisfy no-one:

"[I]t would be naive not to see the political context: the City's role in the financial crisis, the massive bail-out by the taxpayer and the large bonuses that are about to be paid have all conspired to make this a toxic issue for ministers.
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"On that score, the deal that has been reached will probably satisfy no one. Labour - as Ed Balls, the shadow chancellor, made clear yesterday - will continue with its irresponsible rhetoric because it thinks it wins votes. While more lending to small businesses is certainly needed, the banks fear that official pressure will force them to lend money to unsound ventures that might default. And although a commitment to greater transparency is welcome, executives will resent having to declare their earnings when their counterparts overseas do not."

about the £200bn lending target:

"Moreover, it is really now too late to save many companies that were suffering so badly during the recession, simply because those most in need of support have gone bust and are in no position to borrow form anyone.
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"Overall, then, not quite as robust a package as I had hoped for."

the deal isn't enough to provide the closure necessary to be able to forgive the banks:

"The national interest requires a fully competitive banking industry that no longer relies upon a guarantee of solvency provided by taxpayers. Nothing in the statement speaks to that. The banks need an act of closure that would mean that their "time for remorse and apology" was truly over. That has not happened. The banks will go on being the whipping boys of public opinion...
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"As to conceiving how Mr Osborne should have dealt with the banks, we must first answer some questions.
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"If the economy is in such a dire state, how is it that British banks are contemplating paying out billions of pounds in bonuses to their senior executives? There is no remorse here. The immediate answer - because they are still making large profits - begs more questions than it answers. Why are banks so profitable in these straitened times? One reason is the nature of banking. Bankers have exceptionally accurate and detailed knowledge of economic and market trends. This comes from their privileged position as party to every transaction that requires money to change hands - which is pretty much everything. Don't let bankers persuade you how hard their job is - with such good information, who wouldn't prosper?"

While that the lending targets will help small businesses, the Gordon Brown and David Cameron have both failed to stand up to the City:

"The way it was trumpeted by the chancellor, it took an effort to remember that the so-called Project Merlin settlement was actually the brainchild of bankers, not politicians. Or that it was brokered by the former boss of Barclays bank, John Varley. But this is an agreement that has been shaped by bankers and, whether on bonuses or lending, is agreeable to bankers.
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"The first objection to this settlement is a fundamental one: there is no logical reason for ministers to have any give-and-take with bankers."

Finally, Conservative MP that Project Merlin could be a case of reality copying fiction:

"Anyone who has read Ayn Rand's Atlas Shrugged might be forgiven for thinking they've heard of today's Merlin agreement before...
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"In the novel, I seem to remember a bank owner, Midas Mulligan, was similarly ordered to extend credit. Lending was made on the basis of perceived need, rather than the willingness of those with savings to risk their wealth in return for possible reward."

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