The British Bankers' Association said that the bosses of six major banks have formed a taskforce designed to get lending to businesses moving again

In a letter to Chancellor George Osborne, BBA Chairman Stephen Green outlined a series of proposals aimed at stimulating private-sector recovery.

Green wrote that he believes there is a real need to make sure that viable businesses are able to obtain the finance they need to support the recovery of the UK economy. He said the chief executives of the country's top banks will guide a series of work streams that will assess the lack of lending to businesses and propose solutions.

He also mentioned that the objective of the taskforce is to explore the problems currently affecting securitization markets and to explore other issues that will influence the ability of UK businesses to obtain the finance they need to support private sector growth. He agrees with the chancellor that the essential importance of ensuring that credit is available to viable businesses and particularly for the recovery.

The groups will consist of representatives of the banks and members from the Treasury, BIS and the Bank of England and will report to Osborne with the results in October.

Osborne urged the country's banks in a newspaper interview to use strong first-half profits to boost business lending rather than pay large bonuses.

The Bank lent British banks almost 200 billion pounds during the peak of the financial crisis in 2008. If banks reduce lending to businesses in order to make these repayments, it could lead to derailment of Britain's private-sector economic recovery just as sharp public-sector cuts will start to bite.