UK’s central bank, The Bank of England has fot the first time revealed that five of six major lenders in the country have joined the £80bn Funding for Lending scheme (FLS), an initiative that was launched last month to boost lending and the economy.

Speaking at the American International University in London, the Bank of England’s executive director for markets Paul Fisher was quoted by BBC News as saying, "Central banks should not normally have to intervene to provide banks with medium-term funding at reasonable spreads."

"The FLS will not address any of the underlying problems in the euro area or in the financial sector, but given that many of those problems are outside the UK’s direct control, it became necessary for us to do something innovative," Fisher added.

The five FLS participants include Barclays, Lloyds Banking Group, Nationwide Building Society, Royal Bank of Scotland (RBS) and Santander, with HSBC being the only exception.

Fisher further stated that 13 banks and building societies, representing nearly 73% of UK lending, had already joined the scheme allowing them to immediately borrow funding equal to 5% of their loan books.

The institutions can also avail additional funding over the next year, provided they satisfied certain requirements.

"The scheme depends on banks exploiting the opportunity to make more loans, and more profitable loans, because that is in everyone’s interest," Fisher said.

"If they don’t respond by lending more, competition will probably mean that they make fewer profits because other firms will take their business."