Despite current economic conditions the Financial Conduct Authority (FCA), the Bank of England and HM Treasury have told banks to carry on lending to businesses and consumers to alleviate problems duding the virus crisis.
The FCA’s Chief Executive, Chris Woolard, wrote to CEOs of all UK banks asking them to continue lending to businesses as this is important due to the current economic conditions and will help companies overcome the impact of the coronavirus.
The FCA and the Bank of England will monitor the situation closely and have said: “You all have to support the economy and protect jobs during this crucial time".
The government's announcement last week said: “large firms will have additional help from Covid Corporate Financing Facility (CCFF) to help address Covid-19 related disruption to cash flows”.
The Coronavirus Business Interruption Loan Scheme (CBILS) will provide help for smaller businesses with Government backed finance of up to £5 million.
Banks will receive help from the term funding scheme providing credit to businesses and individuals that need additional finance to help them get through this period.
Sensible move but many smaller lenders will pull mortgage products for new lending during this period of instability and we are already starting to see this.