UK regulators issue a joint letter to the UK banks to protect the UK economy and jobs

HM Treasury, the Bank of England (BoE), and the FCA issued a joint letter yesterday to the UK banks. The letter was signed by the Chancellor, the Governor of the Bank of England, and the CEO of the FCA and addressed the CEOs of the UK Banks regarding the subject of Covid-19 outbreak and bank lending.

The UK regulation authorities announced last week a set of unprecedented measures to support UK businesses and protect jobs:

  • For large firms of investment grade or equivalent, the COVID Corporate Financing Facility (CCFF) will provide additional help to address disruptions in the cashflow caused by the Covid-19 pandemic.
  • For small and medium-sized businesses (SMEs), the Coronavirus Business Interruption Loan Scheme (CBILS) will provide government approved support of up to £5 million and the new Term Funding Scheme will provide additional incentives for SMEs and help banks to continue providing credit to businesses and households who need finance to bridge across this period.
  • To support jobs and income, the Coronavirus Jobs Retention Scheme will defer VAT payments and scale up HMRC’s Time to Pau helpline.

UK regulators have taken actions to ensure the financial system has the ability and capacity to provide credit for firms and households that need it. The countercyclical capital buffer will be reduced to 0%. Firms are also reminded to use their capital and liquidity buffer where needed.

The letter outlines as a priority to pass the taken measures to the businesses and consumers and maintain and extend lending even to firms not covered by the CCFF and CBILS, to support and protect UK economy and jobs.

Read more Covid-19 regulatory measures:

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