The plan, known as Project Merlin, was expected to have resulted in an announcement this week but negotiations will now continue, writes the BBC.
About £200bn in loans to firms was to have been made available in 2011.
The stumbling block is thought to have concerned governance issues.
Bank bosses argue lending targets for what might be weaker businesses could breach rules that say any decision should be in the best interest of shareholders.
They also say the banks’ ability to lend to companies and consumers may be restricted if some of the ideas from the Independent Commission on Banking (ICB) set up by the government are implemented. READ MORE
Banks set for staff exodus to US rivals over pay rules
Europe’s banks are facing an exodus of staff to US rivals as regulatory and political pressure drives a growing pay divide between financial institutions headquartered on either side of the Atlantic.
Warnings over the divide follow a roller coaster weekend in which Sir John Vickers, the banking commission chief, said Britain’s lenders could be broken up and talks between finance chiefs and the Treasury over bonuses and lending targets stalled, writes the Telegraph.
Headhunters have warned City staff at some of Europe’s biggest banks are “fed up” and that they expect a wave of applications after this year’s bonus round. READ MORE
Nick Clegg signals support for banks break-up
Nick Clegg has indicated the government would back a break-up of the banks to “make them safe” and protect the British economy from having to bail them out again.
The deputy prime minister said there was a “very strong case” for separating high-risk “casino” banking from low-risk high street banking to ensure banks were no longer “too big to fail”, reports the Guardian.
His comments come after the head of the independent review into banking, Sir John Vickers, indicated he would recommend an overhaul of the banks. READ MORE
