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COVID-19 Pressures Threaten About 4,000 Small UK Financial Firms
Britain’s market watchdog warned about 4,000 small financial firms are at greater risk of failure from the coronavirus as the country endures a third lockdown.
The Financial Conduct Authority said Thursday that the pandemic is pushing the firms to the brink by depleting their liquidity. The survey of 23,000 businesses was carried out between June and August, before the government extended its furlough programs and rolled out vaccinations, and the regulator said it will continue to monitor the pressure on companies.
“Our role isn’t to prevent firms failing,” Sheldon Mills, the FCA’s executive director of consumers and competition, said in a statement. “By getting early visibility of potential financial distress in firms we can intervene faster so that risks are managed and consumers are adequately protected.”
The Financial Conduct Authority (FCA) has today published the results of its coronavirus (Covid-19) financial resilience surveys. The surveys were sent to solo-regulated firms to inform the FCA of the impact of coronavirus on firms financial resilience.
In response to the crisis, the FCA has been monitoring the effects of the economic downturn on firms solvency by rapidly increasing the data it collects on firms. The surveys, which are one of the data sources used to monitor financial resilience, have been sent to 23,000 solo-regulated firms to understand the real-time effect the pandemic is having on the finances of the firms the FCA prudentially regulates. The FCA has also been using existing regulatory reporting data, enhanced data purchased from a third-party provider and in-depth analysis of liquidity for a number of the most significant firms.
James Langton
Thousands of financial firms in the UK are at risk of failing due to fallout from the Covid-19 outbreak, according to new data from the UK’s Financial Conduct Authority (FCA).
The FCA published the results of its coronavirus financial resilience survey, which it launched between June and August 2020.
“Our role isn’t to prevent firms failing. But where they do, we work to ensure this happens in an orderly way,” said Sheldon Mills, executive director of consumers and competition at the FCA, in a release. “By getting early visibility of potential financial distress in firms we can intervene faster so that risks are managed and consumers are adequately protected.”