LONDON, May 4 (Reuters) - Delays in offering full state
guarantees on COVID-19 relief lending hampered the ability of
banks to provide fast financial aid to companies in the first
phase of the coronavirus pandemic, senior British bankers told
lawmakers on Monday.
Banks have come under fire from the Bank of England and the
general public for not providing loans to companies fast enough
as a national lockdown shutters swathes of an economy heading
for deep recession.
The chief executives of commercial banking at domestic
lenders Lloyds Banking Group and Royal Bank of Scotland
said the primary reason relief lending was faster in
countries like Germany and Switzerland was due to 100% state
guarantees offered from the onset of the crisis.
"The key difference ... is that some of the other European
schemes had a 100% government guarantee from Day One," Lloyds'
David Oldfield said.
"That therefore alleviated some of this pressure on banks to
do affordability and the viability checks."
Britain's government has since launched a new 'Bounce Back'
scheme to fully guarantee loans of up to 50,000 pounds to very
small companies.
The scheme will complement its Coronavirus Business
Interruption Loan Scheme and customers who applied for loans
under this earlier scheme will be allowed to switch to the new
scheme, the bankers said.
(Reporting by Iain Withers, writing by Huw Jones, editing by
Sinead Cruise)
