Paul Fisher, Bank of England’s executive director of markets gave evidence to the Treasury Select Committee this morning, where he said that financial institutions involved range from those with “a few billion” on their balance sheets to those with trillions.

He told the committee that “a lot of contact” has been made from financial institutions since the Chancellor announced further details of the scheme last week. He claimed that he has spoken to “plenty of viable borrowers up and down the country,” when quizzed over whether there is demand for the scheme.

Under the scheme, the price of each institution’s borrowing will depend on its volume of lending to the real economy during the reference period. For banks or building societies maintaining or expanding their lending over that period, the fee will be 0.25% pa on the amount borrowed.

After accounting for the cost of using the Treasury bills to borrow money, the total cost of funding for an institution using the scheme will be lower than current term funding rates, even for the strongest institutions.

Fisher acknowledged that the UK’s six largest lenders each have their own targets on the amount of lending they want to do this year.

He said: “We can’t force the banks to lend, but we are trying to put pressure on banks by creating strong incentives for banks to expand their lending to the real economy.