BANKING AND FINANCE STRENGTHENS ITS RESPONSE TO THE OUTBREAK OF CORONAVIRUS

Efforts to overcome the challenge of COVID-19 have been stepped up across the banking and finance sector. The Financial Times (£, p13) reports that leading banks are testing their business continuity planning procedures, developing the capacity for traders to work from home and consulting with regulators to adopt a flexible approach to compliance monitoring. Meanwhile, Andrew Bailey, incoming Bank of England (BoE) governor, told the Treasury select committee yesterday that he has held discussions with the chancellor of the exchequer to ensure there is a coordinated economic response to the virus (Bloomberg, online only). Similarly, the International Monetary Fund (IMF) has announced a global funding package to tackle coronavirus worth $50 billion (The Times, £, p37).

UK Finance announced new efforts by financial services providers to support customers and SME businesses impacted by COVID-19.

Stephen Jones, Chief Executive of UK Finance, said in relation to customers:

?All providers are ready and able to offer support to their customers who are impacted directly or indirectly by COVID 19, which could include offering or increasing an overdraft or allowing repayment relief for loan or mortgage repayments: asking for help early is key.?

For SMEs, he added:

?Banks and other finance providers recognise that the cashflow of small and medium sized businesses may be disrupted by Coronavirus (COVID-19) impacts and are committed to supporting viable businesses in continuing to trade while they implement their contingency plans. We would urge businesses to contact their finance providers early to discuss how they can help support their companies through the coming weeks.?

UK FINANCE RELEASES ITS HOUSEHOLD FINANCE REVIEW FOR Q4, 2019

UK Finance's Household Finance Review for Q4, 2019 has revealed that although modest in size, 2019 saw the first annual fall in gross mortgage lending since 2010. Purchase activity across the country was limited by affordability issues. However, new homeowners in Northern Ireland and Yorkshire & Humberside, as well as home movers in Scotland, have benefited from relative affordability advantages. The data also highlights that the buy-to-let market, whilst still contracting, is levelling off with some growth in the north. Finally, credit card borrowing continues to decline and is at its lowest point since 2013.

NEWS IN BRIEF

UK airline Flybe has confirmed that it has fallen into administration after negotiations with the government over a potential £100 million rescue loan failed (City A.M., p1).

City Minister John Glen has highlighted to the House of Lords? sub-committee on financial affairs that there is ?no secret plan to deviate? from EU banking regulation, adding that the government aims to achieve ?positive? equivalence assessments by June and to retain EU market access (Reuters, online only).

Incoming BoE governor Andrew Bailey raised the possibility with the Treasury select committee yesterday that some of the central bank's operations may be relocated out of London (The Times, £, p37).

The Office for Budget Responsibility (OBR), the independent fiscal watchdog, is expected to reduce Britain's long-term economic growth prospects in next week's Budget due to the government's new post-Brexit immigration policy (The Financial Times, £, p1).

The Times (£, p1) reports that Parliament may be closed for up to five months to help contain the spread of coronavirus.

WHAT THE COMMENTATORS SAY

Simon Nixon, chief leader writer at The Times (£, p41), writes that the transnational challenge of coronavirus should create new incentives for the government to reach a comprehensive economic agreement with the EU. Global cooperation is essential at a time when the OECD forecasts that global growth may halve this year, and the government must maximise opportunities to share resources, supplies and knowledge with its closest trading partners. However, Nixon is sceptical that the government will take the rational course he advocates, fearing that it may instead use the coronavirus crisis as a pretext to take on emergency powers to increase spending for political purposes.

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