A UK banking industry body has welcomed the Bank of England’s call for more research into the risks posed by non-bank financial institutions, warning that a drop in liquidity and NBFI lending appetites could cause “serious problems” for the businesses they lend to, according to Simon Hills, director of prudential policy at UK Finance. “Banks may not have sufficient risk appetite to step in and fill the gap,” said Hills.
His comments come after the Bank of England’s deputy governor, Sarah Breeden, last week called for more research into the risks posed by non-bank lenders at the annual conference on the Prudential Framework Bank of England Agenda for Research.
