Bank of England's Posen attacks banks for failing to deliver value for economy - Telegraph.co.uk

He added that banks were using new capital and gearing requirements as an excuse to limit lending. "They are not being forced to build up capital and cut back their balance sheets as much as they claim... It's an excuse, it's not a reality," he said.

To explain their behaviour, he wondered whether bankers were "reluctant, risk-averse jerks" or if there was a more fundamental problem.

He claimed banks were choosing to roll over loans to big businesses rather than make new loans to smaller firms and stressed that the problem was particularly acute in the UK due to the lack of alternative funding for small businesses. He urged the Government to press ahead quickly with its credit easing programme to get £20bn into the sector.

"Back in October we heard Vince Cable and the Chancellor talk about credit easing to their party conferences ... but we haven't seen the structural changes to go with it," Mr Posen said.

He also hinted that he will be voting for more money printing next week when the MPC meets to decide on interest rates and quantitative easing (QE). "I'm certainly leaning toward doing more QE if we don't change the forecast," he told Bloomberg Television. He added: "£75bn was a good slug last time and there's a case to do it again."

Mr Posen voted to increase QE for a year before the other MPC members joined him in October. The Bank is expected to top up the £75bn second round with another £50bn-£75bn next week. The first round of QE totalled £200bn.

He added that he was "slightly more optimistic than I was a few months ago" despite the ongoing eurozone crisis.