The Bank of England has issued its strongest warning yet about the UKs ballooning consumer debt, saying Britains banks could incur £30bn of losses on their lending on credit cards, personal loans and for car finance if interest rates and unemployment rose sharply.
After assessing the fast growth in the consumer credit market, Threadneedle Street is requiring the banking system to hold an extra £10bn of capital as protection against any future losses after finding that lenders are underestimating their exposure to bad debts in an economic downturn.
Publishing its latest assessment of risks to the financial system, the Bank also spelled out specific concerns about the impact of Brexit on £20tn of derivatives contracts used by companie…
Read the full article at: https://www.theguardian.com/business/2017/sep/25/bank-of-england-warns-a-consumer-debt-crisis-could-cost-banks-30bn