UK FCA: Nearly 4,000 UK Financial Firms Could Close
Around 4,000 financial services companies in the UK are at risk of closure because of the coronavirus pandemic, according to a survey by the country’s Financial Conduct Authority (FCA).
The regulator surveyed 23,000 financial services firms about the impact of the pandemic on their businesses. As a result, around 4,000 firms admitted being at « increased risk » of closure and bankruptcy during the first wave of the coronavirus pandemic.
« The market downturn caused by the pandemic could lead to the bankruptcy of a significant number of companies. At the end of October, we identified that there were 4,000 financial services firms with low financial strength and an increased risk of bankruptcy, although many will be able to improve their resilience as economic conditions improve, » said FCA executive director of consumer and competition Sheldon Mills.
Most of the companies in question are small and medium-sized market players, the FCA added.
According to the authority, during the first wave of the pandemic, liquidity inflows were seen in retail investments (8%), retail lending (8%) in the financial market with institutional investors (83%). Liquidity outflows were in the insurance market (30%), electronic payment and transfer systems (11%) and investment management (2%).