FCA publishes Covid resilience survey results

FCA has published the results of the survey it sent to 23,000 forms on the real-time effect the pandemic is having on their resilience.  Among its conclusions are:

  • failures of firms due to the economic downturn are likely to disproportionately impact some sectors and business models;
  • it is critical to ensure that firms are properly segregating anything that should be segregated and have funds to manage an orderly failure;
  • firms generally forecast more inflows than cash needs, but the margins were quite tight in the insurance intermediation sector in particular;
  • only 13% of respondents had negotiated payment extensions or delayed payments to creditors – and of those that had, just over 20% were from the retail lending sector;
  • over half of the respondents expected the pandemic to have a negative effect on their net income, with retail lending and retail investments forecasting the largest effects, and investment management the least;
  • nearly half of firms said the impact of coronavirus on their business was neutral, with 46% saying it was negative – investment management had the least negative outlook, and retail lending the most negative; and
  • 37% of firms had furloughed employees and 20% had received a government backed loan – again retail lending reporting the highest percentage – with investment management the lowest.

Emma Radmore