BoE announced further measures to ensure the Term Funding Scheme with additional incentives for Small and Medium-size Enterprises (TFSME) can continue to support lending to SMEs through the Bounce Back Loan Scheme (BBLS). In addition to the change announced in May, whereby banks will be able to extend the term of some TFSME funding from four to six years, BoE will allow TFSME participants to extend a part of their borrowings again, to a total term of up to ten years.
Participants will be able to extend the term of TFSME loans by up to a further four years at the point at which the existing six-year TFSME loans mature. The amount of TFSME funding that can be extended will be capped at the amount of BBLS lending on TFSME participants’ balance sheets at that point. TFSME documentation will be updated in due course to reflect this change and to provide further operational details. The TFSME was launched in March 2020 as part of the measures to respond to the economic shock from COVID-19. In May 2020, BoE announced that TFSME participants would be able to extend the term of some of their TFSME funding to align with the term of loans made through BBLS, which was set up to enable businesses to access finance more quickly during the COVID-19 outbreak.
Related Link: Notification
Keywords: Europe, UK, Banking, COVID-19, SME, BBLS, Term Funding Scheme, Credit Risk, Loan Guarantee, BoE
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleAPRA Updates Validation and Derivation Rules in September 2020
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.