MPS SAY GOVERNMENT SHOULD DEVOTE MORE RESOURCES TO TACKLING COVID LOAN FRAUD

The Department for Business, Energy and Industrial Strategy (BEIS) should set out how it will use “legal, regulatory and contractual incentives” to improve how lenders manage bounce back loans and risks to the taxpayer from fraud, a group of MPs has said (Financial Times). A report by the  Public Accounts Committee said that the government should give more resources to counter-fraud agencies, saying that BEIS had been “complacent in preventing fraud” (The Guardian). Meanwhile The Times has a separate investigation into fraudulent use of the Covid-19 loan schemes.

BANK CAPITAL REQUIREMENTS SHOULD BE OVERHAULED

The global regulatory system for bank capital requirements should be simplified to give firms greater flexibility to continue lending during an economic downturn, Sam Woods, deputy governor of the Bank of England, said yesterday (Reuters). The Basel committee of global regulators is currently reviewing the capital buffer requirements. Mr Woods suggested that the existing complex system should be replaced with “a single, releasable buffer of common equity, sitting above a low minimum requirement” which would enable banks to provide more financing in the event of an economic downturn (Financial Times).

NEWS IN BRIEF

The UK’s financial services sector “has not experienced the haemorrhaging” of jobs to the EU that had been anticipated after Brexit, John Glen, the City minister, said yesterday (Financial Times).

230,000 private renters have been served with a Section 21 “no fault” eviction since 2019, according to new figures provided to Sky News.

Government borrowing in the year to March was less than half the amount during the first year of the pandemic, though it was still the third highest since records began in 1947 (The Times).

Russia has halted gas exports to Poland and Bulgaria after the countries refused to pay for supplies in roubles (BBC News).