In a letter from FCA interim chief executive Christopher Wood addressed to bank CEOs, it said it expected banks to take reasonable steps to ensure senior managers with responsibility for small business lending were discharging their responsibilities suitably.
It added its objective will be to ensure there is not a repeat of “well-documented historic issues of SMEs”. It called for lessons to be learnt from those events and that these mistakes could not be repeated.
FCA announces small business unit
Of a new small business unit established by the FCA, interim CEO Christopher Woolard said: “From today (Wednesday 15 April), the FCA has established a new small business unit, headed by one of our senior leadership team, Andrew Wigston.
“It will be overseen jointly by Jonathan Davidson (executive director of supervision – retail and authorisation) and Sheldon Mills (interim executive director of strategy and competition).
“This unit will co-ordinate the activities of the FCA across small business issues, in terms of ensuring regulated firms are supported through the challenges posed by the current crisis, gathering intelligence about the treatment of small businesses by financial services firms during the crisis and ensuring a co-ordinated response by the FCA to any issues identified.
“We will also continue to co-ordinate closely with the financial ombudsman service.”
However, it also praised the work banks have done for many years to provide finance and services to SMEs across the country.
Wood added: “I know you appreciate your role in the current crisis is particularly vital. Through our work over the past few years, we have seen clear evidence that controls in relation to the treatment of SMEs have strengthened and it is vital banks remain vigilant and are focused on ensuring SMEs are treated fairly.”
Wood went on to say how important these firms are to the economy and outlined the Government support measures.
He wrote: “SMEs are absolutely vital to the UK’s economy and Covid-19 brings significant challenges to the financial position of many from the loss of revenue and disruption of cash flow.
“As you know, in response, the Government has introduced a package of measures to support businesses and its employees. For example, through the British Business Bank, it has established the Coronavirus Business Interruption Loan Scheme.
“As the Chancellor, the Governor of the Bank of England and I set out in our joint letter of 25 March, the priority for all of us is ensuring the benefit of measures announced by the Government are passed through to the business and consumers that really need it as soon as possible.”