Tsunami of “Unsustainable” Business Loans to Hit Banks, City of London Grandees Warn

by Wolf Richter
Wolf Street

“Consideration may need to be given” to free money from taxpayers “to meet solvency or liquidity requirements,” but only “at the extreme end,” whatever that means.

Many struggling businesses in the UK, both large and small, will soon be sitting on debt piles they won’t be able to service as the emergency loans they’ve taken out to survive the lockdown and its aftermath begin to fall due. That’s the stark warning of an “interim report” by the Recapitalisation Group (RCG), a task force assembled by The CityUK, one of the UK’s most powerful financial lobby groups, at the “encouragement” of the Bank of England, to explore ways of recapitalizing small and medium-size enterprises (SMEs) when the inevitable debt defaults begin.

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