Bank of England asks high street lenders for details on how they approve loans amid consumer debt concerns

 
William Turvill
Follow William
UK National Debt Hits 1 Trillion
The Bank of England needs the information ahead of a 20 September meeting (Source: Getty)

High street lenders have been asked to provide detailed information on how they approve loans amid Bank of England concerns around consumer debt.

The firms have a deadline in September to provide the Bank with details of how they assess the financial positions of customers.

The questions are in addition to data required for the banks’ stress tests and need to be with Threadneedle Street ahead of the 20 September meeting of the financial policy committee, the Sunday Times first reported. The request was first made in early July.

Last week, the Bank of England’s financial stability director Alex Brazier warned that a rise in personal loans could be a danger to the UK economy. He revealed outstanding car loans, credit card balances and personal loans have risen 10 per cent over the past year, outpacing rises in income.

“The spiral continues and borrowers rack up more and more debt,” he said. “Lending standards can go from responsible to reckless very quickly... Lenders have not entered, but they may be dicing with, the spiral of complacency.”

Read more: Bank of England gains new deputy governor and chief operating officer

Related articles