Fearing a 35% drop in GDP, Bank of England governor pressures banks to speed up coronavirus loans

• The governor of the Bank of England called on British banks to accelerate their distribution of government-backed loans to coronavirus-hit businesses on Friday.
• Bailey warned that a 35% plunge in second-quarter GDP if the lockdown continues was "not implausible" based on economic trends so far.
• It is extremely unusual for a BoE governor to make such a statement.
• "They have got to put their backs into it and get on with it, frankly," Andrew Bailey said in a virtual press conference.
• Only one in 60 companies that expressed interest in the scheme have received funds, according to UK Finance data published this week.
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Britain's banks need to speed up their distribution of government-backed loans to businesses battling to survive the novel coronavirus outbreak, the Bank of England's governor, Andrew Bailey, said in a virtual press conference on Friday.

"They have got to put their backs into it and get on with it, frankly," Bailey said, according to Reuters. The central-bank chief also suggested that the Treasury, which has vowed to underwrite 80% of the cost to banks if debtors fail to repay the funds, could relax its requirements to speed up the process, The Telegraph reported.

Bailey's comments came after UK Finance revealed that just £1.1 billion ($1.4 billion) worth of loans have been approved under the coronavirus business interruption loan scheme (CBILS). Moreover, only one in 60 companies that expressed interest have received funds so far.

The governor recognized that the nation's banks are under "serious strain" as they work through a flood of loan applications with many employees are working from home, Reuters said.

Bailey warned that the budget watchdog's forecast of a 35% plunge in second-quarter UK GDP if the lockdown continues for three months was "not implausible" given early evidence of a "big drop-off in activity."

Following International Monetary Fund and World Bank meetings this week, Bailey said authorities around the globe are prepared to take the needed steps to protect their economies from the coronavirus crisis.

"My conclusion from this week is there is an awful lot of common commitment to do what needs to be done," he said.