SME Forbearance and Its Implications for Monetary and Financial Stability

8 Pages Posted: 15 Jan 2014

See all articles by Martin Arrowsmith

Martin Arrowsmith

Bank of England

Matrin Griffiths

Bank of England

Jeremy Franklin

Bank of England

Evan Wohlmann

Bank of England

Garry Young

National Institute of Economic and Social Research

David Gregory

Bank of England

Date Written: January 15, 2014

Abstract

This article presents the results of an investigation into the extent of loan forbearance in the SME sector and its implications for productivity and financial system resilience. Around 6% of SME borrowers were estimated to be in receipt of some form of loan forbearance in March 2013. This accounted for around 14% of the major five UK banks’ exposure to this sector. SME forbearance appears to account for only a small proportion of the weakness in aggregate UK productivity and also seems unlikely to threaten financial system resilience.

Suggested Citation

Arrowsmith, Martin and Griffiths, Matrin and Franklin, Jeremy and Wohlmann, Evan and Young, Garry and Gregory, David, SME Forbearance and Its Implications for Monetary and Financial Stability (January 15, 2014). Bank of England Quarterly Bulletin 2013 Q4, Available at SSRN: https://ssrn.com/abstract=2379336

Martin Arrowsmith (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Matrin Griffiths

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Jeremy Franklin

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Evan Wohlmann

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Garry Young

National Institute of Economic and Social Research ( email )

2 Dean Trench Street
Smith Square
London, SW1P 3HE
United Kingdom

David Gregory

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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