Government and financial regulators tell banks to keep lending

British banks must keep lending to businesses through the coronavirus crisis to ensure viable companies do not fail, the government and financial regulators have urged.

Chancellor of the Exchequer Rishi Sunak, Andrew Bailey, Governor of the Bank of England, and Chris Woolard, acting CEO of the Financial Conduct Authority have written to the CEOs of UK banks updating them on the COVID-19 situation and requesting they support the economy.

The letter said: 'This will require a willingness to maintain and extend lending despite the uncertain economic conditions. We must ensure that firms whose business models were viable before this crisis remain viable once it is over.'

The Chancellor has made £330 billion available to support the economy during the crisis.

However, there have been concerns about access to the government's Coronavirus Business Interruption Loan Scheme and the pace at which some banks are supplying emergency credit.

In response, the British Business Bank has now opened the scheme to all lenders who want to participate, subject to an accreditation process.

Internet link: Coronavirus Business Interruption Loan Scheme