Project Merlin creates an image of a wizzardly solution to the lack of bank lending.

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So why is SME lending a bit behind the schedule outlined in Project Merlin?

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Two government-backed schemes, Project Merlin and Funding for Lending (FLS) have apparently had little effect on business lending so far.

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On Project Merlin she said people would "recognise" Mr King's comments about the banking industry in terms of how they deal with consumers.

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As agreed in the Project Merlin deal, Barclays has disclosed the pay of its five highest-paid executives below board level for the first time.

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Now RBS has failed to hit the so-called "stretch" targets for lending to small businesses, agreed with the Treasury in Project Merlin, by a modest margin.

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So the so-called Project Merlin lending figures, due to be published next month, will be scrutinised, to see whether Barclays, HSBC, Lloyds, Royal Bank of Scotland and Santander have lent to business what they promised the Treasury they would lend.

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It would have been embarrassing for Barclays if it were lending less to businesses than it promised the government it would do under Project Merlin, because that agreement between the big banks and the Treasury was its idea (or, more precisely, that of its previous chief executive, John Varley).

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But right now the government is cutting the banks some slack, partly because Project Merlin was not signed until February 9, so for the first 40 days of the quarter the banks were not subject to the agreement and were able to lend as much or as little as they chose.

BBC: Pressure on banks to accelerate small business lending

As for lending to small business, RBS has to date marginally missed the so-called "stretch" targets it agreed with the government under the Project Merlin agreement - and like all the big banks, it stands accused of not doing enough to support smaller or younger companies that represent the UK's economic future.

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For what it's worth, the gossip in bank boardrooms is that Mr Varley is so miffed at the apparent implosion of his assiduous efforts to agree a deal with ministers (which went by the moniker of Project Merlin) that it contributed to his decision last week to step down as chief executive a few weeks earlier than originally announced.

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