More than 70 lenders ranging from high street banks and building societies such as HSBC and Nationwide to digital and specialist lenders such as Starling Bank and Aldermore collectively borrowed £193bn from the Bank of England as part of an emergency programme rolled out in the early days of the Covid-19 pandemic in 2020.
The term funding scheme for small and medium-sized enterprises (TFSME), which predated the government's bounce back loan programme, was meant to encourage banks to keep lending to small businesses amid growing economic uncertainty. It boosted bank balance sheets at minimal cost, having been tied to the Bank of England's base rate, which was cut to a record low of 0.1%.
The central bank is now demanding that lenders repay their debts, with £100bn of the remaining £153bn worth of loans falling due over the next 18 months.
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