UPDATE 1-BoE's Bailey urges banks to commit to post-COVID recovery

(Adds details)

By Andy Bruce

LONDON, Nov 17 (Reuters) - Britain's economy is undergoing
lasting changes as a result of the COVID-19 pandemic and the
financial services industry must make a "major commitment" to
support the investment that will be needed, Bank of England
Governor Andrew Bailey said.

While the pandemic was unlikely to prompt the huge shifts in
Britain's industrial makeup that took place in the 1980s and
1990s, Bailey said there was no room for complacency.

"None of us have good answers yet to how much these changes
will persist, or even increase. But my best guess is that there
will be lasting changes," Bailey said in a speech to TheCityUk,
a financial services industry group.

The changes brought by COVID, and the challenge of
addressing climate change, would require a "major commitment"
from the financial services industry, Bailey said.

They also underlined the importance behind a drive at the
BoE to look at how the financial system can spur more productive
investment.

Bailey warned that authorities would keep an eye on risks
from higher debt levels.

"While the current low level of interest rates supports the
sustainability of UK corporate debt, higher leverage would make
the corporate sector more vulnerable to interest rate or
earnings shocks," he said.

Britain's economy on course for its worst year in a century
and Bailey pointed to a muted outlook for investment next year
because of the pandemic but also uncertainty about Brexit.

But the recent news about positive COVID-19 vaccine trials
represented "some light at the end of the tunnel," he said.
(Editing by William Schomberg)