UK banking regulations to stifle credit
Banking regulations in the UK will make less credit available this year, according to research from Fico, FT Adviser reports.
Fico's credit risk survey found that 91% of UK respondents predict that banking regulations would reduce credit availability in the year to come. However, 36% claim either small businesses or consumers would find it harder to get credit.
This clashes with the overall figure for Europe, where 71% of European bankers expect small businesses to have difficulties obtaining credit.
Mike Gordon, Fico VP for Europe, the Middle East and Africa, says the survey results show that credit demand across Europe will shrink, but supply will shrink even faster, particularly for small businesses, The Sacramento Bee states.
Gordon adds: "It's notable that in the UK, which has had a tremendous focus on small business lending through such efforts as Project Merlin, our survey says the increases in demand and supply will be roughly equal, and half as many respondents, just 36%, say small businesses will find it harder to get credit."
While a grim economic outlook may be part of the reason, risk professionals clearly pointed a finger at banking regulations, Market Watch says.
Around 78% of respondents said banking regulations will reduce credit availability. In the UK and Ireland, that percentage grew to 91%, the highest for any region in the survey.
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