By Huw Jones
LONDON (Reuters) – Regulators will monitor how Britain’s furlough scheme ends this month for signs of distress among consumers, the Financial Conduct Authority said on Wednesday.
It also said it was ready to take more legal action to counteract an upturn in financial crime triggered by COVID-19.
Britain rolled out measures from March 2020 to ease the shock on consumers and businesses from the economy going into lockdown to fight the pandemic, triggering the worst downturn in 300 years.
Regulators and central bankers are nervous removing the measures will affect debt and employment.
“During the pandemic, up to 5.8 million temporary payment deferrals were granted for credit cards, loans and mortgages,” FCA CEO Nikhil Rathi said in a speech to the Mansion House in London’s historic financial district.
“Through careful planning and collaboration with consumer groups and industry, these have been phased out without acute consumer distress, though we remain vigilant as the furlough scheme ends next week.”
During the pandemic, financial crime rocketed as more people invested online.
Criminals stole 754 million pounds ($1.03 billion) in Britain through bank frauds in the first half of this year, up 30% on the same period in 2020, piling pressure on the FCA to get tougher.
“We have often been criticised for acting slowly or with too much risk aversion. This is changing,” Rathi said.
“We will litigate more if we need to, recognising we won’t win every aspect of every case but also appreciating that legal certainty can provide considerable benefits for industry as well.”
Brexit led to Britain’s financial sector being cut off from the European Union, raising pressure on regulators to help London remain a competitive global financial centre.
The government has set out reforms to boost the capital market’s attractiveness.
“The proposed reforms are far-reaching and will mean international firms can have confidence that we will maintain an open, global and market-leading approach,” Rathi said, adding the FCA would implement quickly agreed changes.
($1 = 0.7324 pounds)
(Reporting by Huw Jones; editing by Barbara Lewis)
