Banks Seek Government Support To Help Firms At Risk From No-Deal Brexit

www.oann.com | 2/12/2019 | Staff
Nighty (Posted by) Level 3
LONDON (Reuters) – British banks are seeking government support to help businesses deal with fallout from a potential “no-deal” Brexit next month, including cash flow problems and shipment delays that are predicted to lead to a spike in insolvencies.

But their requests, ranging from specific financial support for businesses hit by supply chain problems or delayed payments to guidance on how to lend to those in financial trouble, have fallen on deaf ears, two senior bankers from two of Britain’s major banks told Reuters.

Engagement - Situation - Banker

“We have had next to no engagement which we think is odd given the critical situation we’re in,” one senior banker said.

“We have not had detailed discussion on the business support side. We need an understanding of what package the government has put together – stimulus or otherwise … It’s critical politics but it does seem there’s no capacity to do it.”

Bank - England - Week - Economy - Course

The Bank of England warned last week the British economy was on course for its weakest year since the global financial crisis and forecast a one in four chance of Britain tipping into a recession this year.

Trade credit insurer Euler Hermes last month suggested a no-deal Brexit could result in a 20 percent jump in insolvencies, compared with a 9 percent rise if a Brexit deal was secured.

Banker - Bank - Proposal - Treasury - Fund

The second banker from the other major British bank said he had made a proposal to the Treasury to launch a major fund to help firms threatened by temporary cash flow issues. Currently British banks are prohibited from lending to companies that are on the verge of going bust.

But the banker said this plan had not as yet been taken up by the Treasury.

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