News in brief - 3 April 2020

CHANCELLOR STRENGTHENS FINANCIAL SUPPORT TO BUSINESSES IMPACTED BY COVID-19

The chancellor Rishi Sunak has announced further measures to strengthen financial support to businesses impacted by Covid-19, including by widening access to the government's Coronavirus Business Interruption Loan Scheme (CBILS) to all firms that were viable before the pandemic struck (BBC News). This will iron out a flaw in the scheme which required the government-backed loans to only be made available to firms that had not been able to secure a commercial loan from their bank (Financial Times, £, p3). Meanwhile, ITV News Political Editor Robert Peston reports that the Treasury has agreed to requests from banks to change the scheme to remove the need for personal guarantees, adding that banks have been 'trying to do the right and decent thing?.

Stephen Jones, chief executive of UK Finance, comments in the Daily Telegraph (£, B2) that it is ?completely disingenuous? to accuse banks of not trying to provide state-backed loans under CBILS as quickly as possible. Speaking on BBC Radio 4's Today Programme this morning, Mr Jones said: "The changes to the plan were changes we asked for very strongly having had a week of experience of mobilising this scheme at very short notice. This change is extremely welcome and it means that banks will not be forced to make very unenviable assessments in terms of who cannot or can access the scheme in terms of viable businesses out there."

The Treasury has also announced a new scheme to support larger firms that aren't eligible for CBILS or the Bank of England's Covid Corporate Financing Facility. The new initiative, called the Coronavirus Large Business Interruption Loan Scheme (CLBILS), will allow businesses with a turnover of between £45 million and £500 million to borrow up to £25 million, 80 per cent of which would be guaranteed by the state (The Independent).

FINANCIAL STABILITY BOARD IN TALKS WITH GOVERNMENTS OVER KEY FINANCIAL SERVICES WORKERS

The Financial Stability Board (FSB) is in talks with governments over the need to allow key staff at financial firms to work on site during the coronavirus epidemic to keep markets open, reports Reuters. The international body of financial regulators wants to make sure that if lockdowns become more stringent, key financial workers or any third-party providers they use are not hampered in delivering core services and maintaining the flow of credit to households and businesses. The FSB also said the transition away from Libor benchmarks by the end of 2021 remains a priority to strengthen the global financial system.

NEWS IN BRIEF

National Trading Standards (NTS) has warned that the Covid-19 pandemic has led to a rise in criminals committing doorstep crimes, particularly against people in vulnerable situations who are isolated and living alone (BBC News). For the latest advice on how consumers can protect themselves from Covid-19 related scams, visit the Take Five to Stop Fraud campaign.

Debt charities have written a letter to the chancellor urging him to write off £10 billion worth of outstanding council tax and social security debts, to help people on low incomes struggling to manage their finances through the coronavirus pandemic (Financial Times, £, p2).

High street retailers in the UK suffered their worst fall in sales in 12 years, according to the accountancy firm BDO (The Times, £, p37).

The European Banking Authority (EBA) has published guidance on payment holidays granted by banks to businesses impacted by Covid-19, making it clear these don't need to be counted as missed payments for accounting purposes (Reuters).

Over 10 million US citizens have applied for unemployment benefits in the past two weeks, with economists predicting the unemployment rate could reach levels not seen since the Great Depression as a result of the current lockdown (Daily Telegraph, £, B1).

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