FCA: Finance Sector Should Reassess Debt And Risk, Recapitalise

Charles Rendell, chair of the Financial Conduct Authority, recently made an online presentation to retail bankers and others on the “front line” of the financial services industry.  Mondovisione carries the text of the speech. We offer bullet-point highlights and the introduction. The full text is available here:


  • The coronavirus (Covid-19) crisis shows we need to reassess our approach to consumer debt, high risk retail investments and financial exclusion
  • We need a robust framework for dealing with small business loans which turn out to be unaffordable
  • UK financial markets and businesses are well placed to help the country and the world recapitalise
  • The FCA has worked with pace and pragmatism in the crisis and will make these ways of working its new normal as it transforms for the future.

Since the start of the coronavirus pandemic I’ve discussed with a number of those present how financial services firms, regulators, the government and the voluntary sector have been working together to keep the financial system operating, get businesses through the lockdown, and consumers through the crisis.

We don’t agree about everything, but we agree on a lot. And we agree first and foremost that we all owe our gratitude to tens of thousands of people who work in financial services up and down the country and who have been on the front line. The people who have kept bank branches and ATMs open, cash circulating and payments flowing. The people who have manned the phones under enormous pressure to help hundreds of thousands of people manage their debt burdens and keep their businesses afloat. The people who have kept key systems resilient.

Historical Performance And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

That figure is the result of over £21 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.

  • Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.

All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.

So here’s our guide to the process:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.

Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.

Risk: Security, Access, Yield

Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.