Banks ‘risk reputations’ by failing to help borrowers

Credit rating agency Moody’s has warned that mortgage lenders risk reputational damage if they fail to help customers struggling with rising borrowing costs. It said banks and building societies faced “social risks” from interest rates that are climbing as the Bank of England looks to contain inflation. Moody’s said: “We expect banks to work proactively with their customers to refinance maturing loans or, for those with constrained cash flows, to avoid default,” adding: “Failure to do so would entail reputational risk". This comes just a few months after Financial Conduct Authority chief executive Nikhil Rathi warned financial services firms that how they navigate this period of economic turmoil “will determine the industry’s reputation for decades ahead". 

The Times (13/02/2023)