Chancellor Rishi Sunak and Bank of England Governor Mark Carney have met leading banks to discuss support for small and medium firms through the coronavirus outbreak.
In the Budget on Wednesday, Mr Sunak announced a series of measures to help firms, including a coronavirus business interruption loan scheme, amid fears of widespread economic disruption.
In a co-ordinated move, the Bank cut interest rates while providing further support to banks to enable them to carry on lending to businesses.
We will be monitoring closely how all banks use these enormous resources to help keep firms in business and people in jobs during the months ahead.Mark Carney
Following the meeting, Mr Sunak said: “Today’s summit demonstrates that the Government’s response is clearly and closely coordinated with the Bank of England, and that we are working with the banking sector to do everything it takes to support businesses through this difficult time.”
Mr Carney added: “We are providing banks with hundreds of billions of pounds of resources to support UK households and businesses during this challenging period.
“We will be monitoring closely how all banks use these enormous resources to help keep firms in business and people in jobs during the months ahead.”
Some in the banking industry have, however, expressed concern that regulations mean they cannot lend unless they have a “clear line of sight” on when the loan will be repaid which, currently, they are unable to do.
A source close to one of the banks in the meeting told the PA news agency: “Liquidity is not an issue, but, the Government expect us to make sure anyone we lend to can pay back the loan.
“But, with the situation we’re in, that’s even harder to do now.”