Financial Times reports that a number of banks in the U.K. have agreed to give smaller firms more power when it comes to complaints about their lenders (which include the banks) – a move that the publication said aims to “restore trust” in corporate banking.
The agreement comes amid suggestions to the industry group known as UK Finance, which included boosting the powers of ombudsman services and setting in place a framework that is geared toward addressing “unresolved historic complaints.”
Though a number of small business associations welcomed the news, FT also reported that some observers in Parliament are less sanguine. The Treasury Select Committee, according to reports, has stated that the proposals are not strong enough. By way of example, the Treasury Committee Chair Nicky Morgan has stated that “for more complex cases…a Financial Services Tribunal is required.” Similarly, the All-Party Parliamentary Group on Fair Business Banking has said that it “appreciates [UK Finance’s] response and welcomes the dialogue that it generates,” yet there is still a need for a tribunal.
News came earlier this week germane to small business lending in the U.K., where banks are looking to prepare their clients ahead of Brexit and what might be a tighter lending environment. That comes in tandem with concerns over the possibility of defaults in the event of delays in cross-border payments or supply chains.
As noted in this space, the Royal Bank of Scotland (RBS) tripled its small business “growth fund” from £1 billion ($1.27 million USD) to £3 billion. RBS has identified about 2,000 firms that could be considered “at risk” as Brexit looms, and has been extending import and export financing.
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