As 4,000 city businesses face bankruptcy in the Covid crisis, customer finances are at risk.

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The 23,000 companies FCA survey predicts more failures from the first wave of outbreak if the UK economy fails to recover.

About 4,000 city businesses are at increased risk of failure due to the Covid crisis, and the financial regulator has warned that nearly a third of these could potentially hurt customers if they collapse.

“A survey by the Financial Conduct Authority to determine the financial resilience of nearly 23,000 regulated firms found that “a large number of firms fail over the next 12 months” could result from the financial stresses caused by the first wave of the outbreak, unless the U.K. The economy is beginning to recover.

The regulator said the greatest decline in cash and assets that can act as reserves during a downturn has been experienced by insurance intermediaries and brokers, payments and e-money companies, and investment management firms.

“unprecedented – and rapidly evolving.”unprecedented – and rapidly evolving.

“A market downturn caused by the pandemic threatens a large number of businesses failing.

At the end of October, we found that 4,000 low financial resilience financial services companies are at increased risk of failure, although many of them will be able to reinforce their resilience once economic conditions improve,” Mills said.

“These are predominantly small and mid-sized firms, and about 30 percent have the potential to do harm if they fail,” he said.

Nearly 60% of all surveyed firms said they expected their profits to be affected by the Covid crisis, with nearly 700 firms predicting it would fall by more than two-thirds due to the pandemic.

The FCA stated that disorderly defaults could benefit consumers by, for example, reducing competition and affecting “market efficiency and overall trust in the UK financial system.”

The inquiry involved insurance companies and brokers, investment management, institutional lenders, providers of crowdfunding, debt collectors and high-cost lenders, as well as participants in the wholesale financial market, such as brokers and exchanges.

There is a significantly greater number of businesses at risk of failure than initially predicted.

The U.K. Financial Conduct Authority warned in September that, due to the economic stresses induced by the covid pandemic, hundreds of small and medium-sized companies could fail.

The FCA, however, pointed out that before the Covid vaccine was approved and released, the survey results were obtained, the government extended furloughs until April 30, or new foreclosure measures.

The new survey excludes the 1,500 largest financial companies in the U.K., which are overseen by the Prudential Supervision Authority of the Bank of England.

But, following damning accounts of its handling of London Capital and Finance before the company’s collapse, the FCA will still be under pressure to show it has done its utmost to safeguard investors affected by firm failures.

An independent audit last month found that the FCA failed to adequately regulate the mini-bond provider, which, after going under in 2019, wiped out the savings of thousands of people.

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