New FCA boss to hold crisis coronavirus meeting with banks
The interim boss of the City watchdog is set to hold crisis talks tomorrow with the Bank of England and the heads of the high street banks to try and plot a course through the economic chaos triggered by coronavirus.
Chris Woolard said he wanted the industry to work out how to protect people unable to pay mortgages, loans and credit cards as a result of the coronavirus crash.
“This is about us working with the industry to try to get sensible solutions quickly,” He told the Sunday Times. “It’s about saying, ‘How do we strike the right balance between helping people in the short term and doing the right thing for them in the next three, six months or even longer?’”
Woolard took over from Andrew Bailey as interim chief executive of the Financial Conduct Authority (FCA) when the latter joined the Bank of England as governor.
Banks have already pledged to introduce mortgage holidays for customers and building society Nationwide has introduced a three-month loan and credit card payment break.
However, Woolard said if banks compound the interest owed on debts it may not ultimately help consumers.
“Rolling up and compounding quite a high rate of interest on that debt isn’t necessarily going to help,” he told the Sunday Times.
Banks have already been hit by public and political pressure in relation to policies connected to a new emergency government business loan scheme.
Banks such as Barclays and HSBC were criticised for asking directors for personal guarantees that the money would be paid back.
There was also criticism of the levels of interest being charged, despite the government telling the banks that it would cover them for up to 80 per cent of the loan.
Barclays has since rowed back on asking for personal guarantees for loans less than £250,000.
Last week the FCA, alongside the Bank’s Prudential Regulation Authority and audit watchdog the Financial Reporting Council, told companies they could delay their financial results for at least two weeks during the crisis.
The regulators also said issuing preliminary figures in advance of audited financial statements was not necessary as it was adding “to the pressure on companies and the audit profession at this moment”.
The FCA is expected to make further announcements this week.