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 New capital rules will harm lending to SMEs and first-time buyers

George Osborne has been warned by a group of banking, business and property executives that small businesses and first-time buyers could be hit by new European capital rules. Proposals from the Basel Committee on Banking Supervision would push up borrowing costs strangling lending in Britain, they argue. The heads of the BBA, the FSB and Arla are urging the Chancellor to force a "rapid rethink" of the plans. "These new measures could mean that many lenders would have to significantly increase the cost of lending to key groups like small businesses and first-time buyers," said the BBA"s chief, Anthony Browne. "There is a risk that small businesses - lending to which neither created nor exacerbated the financial crisis - could be those most adversely affected by the new rules." Banks will have to set aside capital buffers worth up to 300% of the value of loans to the smallest firms report Harris & Co chartered accountants Northampton, the specialist small business accountants

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