An investigation by the City regulator into car finance loans could have “significant financial ramifications” for lenders, a top official at the Bank of England has warned.
The comments by Sam Woods, a deputy governor at the Bank, will fuel speculation that lenders face the threat of big fines or hefty compensation payouts as a result of the inquiry, which was announced by the Financial Conduct Authority last month.
City analysts are already seeking to assess the possible impact on the motor finance industry, with Royal Bank of Canada, a broker, estimating a possible liability of between £2 billion and £8 billion. Gary Greenwood, an analyst at Shore Capital, another broker, has forecast a £5.5 billion hit.
Woods, who runs the Prudential Regulation Authority, which