Source · Select Committees · Treasury Committee
Recommendation 19
19
Acknowledged
Paragraph: 110
Disproportionate personal guarantees may reduce SME finance access; support FCA investigation within current remit.
Conclusion
Disproportionate use of personal guarantees may be a factor in driving down access to finance, either owing to lack of collateral or simple risk aversion from businesses who do not wish to take them out. We support the FCA’s investigation into the fair and proportionate use of personal guarantees that fall within its existing remit. The FCA’s remit is set by Parliament, and we do not feel that widening it would be appropriate at this time. This is because the unintended consequences of introducing new regulatory frameworks to deal with specific issues in SME lending market could actually result in a reduction in the accessibility of finance for SMEs. We may revisit this in the future and will monitor the FCA’s progress on the matter of personal guarantees.
Government response summary AI-generated
The government provides a general statement of commitment to high standards of protection and financial inclusion, without specifically addressing the FCA's investigation into personal guarantees or its remit.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
110
Government Response
Acknowledged
HM Government · verbatim extract
Acknowledged
35. The Government agrees with the Committee that it is important to introduce regulation only where there is a clear case for doing so, to avoid imposing additional costs on lenders that could ultimately lead to higher costs for business customers.
Read the full response on Parliament ↗