In the past, company officials said they were working to improve lending practices at former Associates branches.
The government said its decision to pull back credit from the overnight lending market was meant to force banks and financial institutions to improve lending standards and better guard against risk.
In its consultation on regulation, the FCA referred to research by the Personal Finance Research Centre at the University of Bristol as "ambiguous" about a cap, "on the one hand [it suggested] possible improved lending criteria and risk assessments.
Britain's economy has been improving since the beginning of the year after low interest rates, which have been in place since March 2009, were combined with more recent policies to improve lending and the availability of mortgages.
Several MPC members have indicated recently that the depressed UK economy could demand a further round of QE, which involves the bank buying government bonds from banks to boost their finances and improve lending rates.
Over time, the Funding for Lending Scheme will improve lending conditions, though it is too early to measure any impact yet.The bankers' optimism is admirable but their confidence is not backed up with any evidence.
The stronger performance reflected that banks are also setting aside less money to cover future losses than they were before and taking advantage of ultralow interest rates to improve lending margins.
Britain's economy started to recover at the beginning of the year as the economic crisis in the euro zone, Britain's largest export market, stabilized and some government initiatives helped to improve lending and the housing market.
With the threat of a double-dip recession worrying their members, some of Britain's biggest business lobby groups have urged the monetary policy committee to step in with more QE, which involves buying government bonds from banks to boost their finances and improve lending rates.
The worsening recession started to take a toll on the popularity of Mr. Brown's Labor Party, whose ratings dropped below that of the opposition party after the government admitted an initial effort to improve lending was inadequate to deal with the crisis.
