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Britain’s financial watchdog ‘vigilant’ ahead of COVID furlough expiry By Reuters

© Reuters. FILE PHOTO – Shoppers walk near Bullring, a shopping center owned by Hammerson in Birmingham, Britain. November 4, 2020. REUTERS/Andrew Boyers

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.

The Financial Conduct Authority also stated that it is ready to increase legal enforcement to combat an increase in financial crimes triggered by COVID-19.

Britain implemented measures in March 2020 to reduce the impact on businesses and consumers of the economic panic that resulted from the country’s economy being put into lockdown to combat the pandemic. This was the most severe downturn since 300 years.

Central bankers and regulators worry about how the elimination of the measures might affect employment and debt.

Nikhil Rathi (FCA CEO) said that up to 5.8 million mortgage, loan, and credit card payment deferrals were given during the pandemic. This was in an address to Mansion House in London’s historical financial district.

These have been eliminated without causing consumer distress through careful planning and cooperation with industry and consumer groups. However, we will continue to monitor the furlough program which ends next week.

Financial crime rose as people made more investments online during the pandemic.

In the first half this year, 754 million pounds (£1.03 billion), was stolen in Britain by bank fraudsters. This is 30% more than the period in 2020. It has put pressure on the FCA, which must be tougher.

We have been often criticised for not acting quickly or with enough risk aversion. Rathi explained that things are changing.

“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 saw Britain’s financial industry cut off from Europe, increasing pressure on regulators for London to remain competitive.

To increase the attractiveness of the capital markets, reforms have been proposed by government.

Rathi stated that the proposed reforms were extensive and international companies can be confident they will receive a market-leading, open and global approach. He also said that changes would be implemented quickly by the FCA.

($1 = 0.7324 pounds)

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.