U.K. Banks Told to Justify Consumer Credit as Risks Mount
- PRA says resilience of consumer-credit portfolios is reducing
- Risks of motor finance, zero-rate credit cards highlighted
Shoppers sit and rest with multiple branded shopping bags, on Oxford Street, in London, U.K., on Friday, Nov. 25, 2016. Black Friday first became a part of U.K. shopping culture in 2014 when a rush for bargains saw fights break out as crowds gathered outside stores, in 2016 however, only 21 percent of British consumers interviewed by consultant Retail Economics said they plan to shop for Black Friday bargains.
Photographer: Luke MacGregorThe Bank of England told U.K. banks to prove that their policies on credit cards, personal loans and other types of consumer lending won’t leave them weaker in a downturn.
The BOE’s Prudential Regulation Authority said on Tuesday that firms need to show that they’re not underestimating the risks of consumer credit given the current “benign economic environment.”