Vince Cable and George Osborne held a “banking brainstorm” at Number 10 on Wednesday with leading economists and industry experts to thrash out some of the possible ways of forcing banks to lend more.

The business secretary, the chancellor and two junior ministers met eight other leading lights, including regulators, economists and former bank bosses.

They included Richard Lambert, director-general of the CBI, the employers’ organisation, Spencer Dale, chief economist at the Bank of England, and David Strachan, in charge of financial stability at the Financial Services Authority.

The meeting followed a similar one at the business department between Mr Cable and Stephen Hester, chief executive at the Royal Bank of Scotland, which dealt specifically with lending to small and medium-sized companies. The two meetings marked the first drive of an effort to find ways to make banks lend, after the two part-nationalised banks, RBS and Lloyds Banking Group, missed their net lending targets under the previous government.

Mr Cable hopes to have some ideas to put forward in a green paper on bank lending before parliament breaks up for the summer at the end of July.

People at the business department and the Treasury were tight-lipped about what was discussed, but one person familiar with the meeting said several options were discussed.

In a possible sign that the government could drop net lending targets, which have been criticised for punishing banks if companies pay back loans, the source said such targets were “not what we are majoring on”.

Additional reporting by Patrick Jenkins

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