BoE issues consumer credit warning to banks
Preliminary stress-test results show UK banking system could incur loss of £30bn over three years
The Bank of England has issued a warning to banks about the rapid growth of consumer credit, which has “created a pocket of risk”, affecting the financial system’s ability to withstand an economic shock.
In its latest statement on the health of the UK banking system, the BoE’s Financial Policy Committee (FPC) says that despite an improvement in the quality of consumer credit, lenders have been “underestimating the losses” they could incur in a downturn.
“This is not a material risk to economic
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