Financial Conduct Authority chair Charles Randell has raised concerns about rising levels of consumer and corporate debt as a result of the COVID-19 pandemic. Delivering a speech online to the UK’s bank bosses, he said they need to accelerate preparations for dealing with businesses unable to repay funds borrowed to help them survive.
Over 860,000 UK businesses have taken out state-backed loans worth over £38bn under three emergency credit programmes. Mr Randell said that some of the debt incurred will turn out to be unaffordable and will need to be tackled fast to avoid dragging on recovery.
“Lenders will need to scale their arrears-handling functions quickly, and invest in training and controls”, he advised, adding: “There needs to be an appropriate dispute resolution system, and we are working with the Financial Ombudsman Service and the Business Banking Resolution Service to ensure that there is capacity to deal with the volumes we may see.”
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