Bankers baffled by FCA's aims in ancillary business probe

By Jon Hay, Mike Turner, Silas Brown
19 May 2020

Loans bankers are puzzled by a probe by the UK's Financial Conduct Authority into whether banks attached improper conditions to loans to companies during the coronavirus crisis. They are concerned the FCA could edge into criticism of the system of bank-client relationships that underpin modern corporate finance, and some believe this is already having an influence on how companies think about mandates.

So called ‘tying’, in which a bank offers a company a loan at an attractive rate on the precondition that it will later win other mandates for other financial services, like equity or bond raising, is prohibited by UK regulators, and bankers say it does not occur.

But ...

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