ABSTRACT
The freezing of business activity in these hard-hit sectors has had implications for their cash flow, servicing of debt, potential insolvency and hence their market valuation and credit ratings. Besides public finance packages for emergency help, such as furloughing, financial regulators’ initiatives play a part in the overall mosaic to prevent systemic damage to the economy and to the financial sector’s roles in risk and investment allocation. In the United Kingdom (UK), the financial regulators, i.e. the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA), released temporarily the application of certain regulatory laws and issued extraordinary measures to regulated entities to suspend the application of private contractual laws. Regulatory suspension has been applied in relation to the repayment of loans granted to household borrowers. Payment holidays are applicable to consumer credit and mortgages and not to business loans. Most importantly, the UK Government has announced fiscal support for two business loan schemes.
