Published by Global Banking & Finance Review®
Posted on March 6, 2026
2 min readLast updated: April 1, 2026
Add as preferred source on GoogleThe Bank of England’s Prudential Regulation Authority is probing banks’ exposure to failed UK mortgage lender Market Financial Solutions (MFS), with inquiries into due diligence practices. Barclays alone is reported to be owed approximately £500m–£600m amid allegations of significant collateral shor
March 6 (Reuters) - The Bank of England is questioning lenders including Barclays about their exposure to collapsed UK-based mortgage lender Market Financial Solutions (MFS), the Financial Times reported on Friday, citing people familiar with the matter.
Officials at the central bank's Prudential Regulation Authority (PRA) have requested information from lenders about funds they extended to the Mayfair-based bridging loan provider, and are concerned banks may not have carried out sufficient due diligence, the report said.
MFS was placed into administration last week following allegations of financial irregularities and mismanagement, prompting concerns over banks' and private credit funds' exposure to the lender.
Barclays declined to comment on the matter when contacted by Reuters.
"We are constantly monitoring the financial system and wider markets and stay in close contact with firms. It is the responsibility of firms to manage the risks to which they are exposed," a spokesperson for the BoE said in an email to Reuters.
The central bank in the email also said it regularly stress tests banks and insurers and had launched a system-wide exercise examining how riskier forms of non-bank lending behave under stress and the potential knock-on effects for UK financial stability.
Barclays is owed 495 million pounds ($662.61 million) from its exposure to MFS, Reuters reported on Wednesday, citing a source familiar with the matter.
The PRA has not yet launched a formal investigation, though it has the power to impose fines and restrictions on banks that breach its rules, the FT reported.
($1 = 0.7470 pounds)
(Reporting by DhanushVignesh Babu in Bengaluru; Editing by Sahal Muhammed and Maju Samuel)
The Bank of England is questioning lenders about their exposure to Mortgage Financial Solutions (MFS) due to concerns about due diligence after MFS collapsed amid allegations of financial irregularities.
Barclays is reportedly owed 495 million pounds ($662.61 million) due to its exposure to the collapsed mortgage lender MFS.
As of now, the PRA has not launched a formal investigation but has requested lenders to provide information about their exposure to MFS.
MFS was placed into administration following allegations of financial irregularities and mismanagement.
The Prudential Regulation Authority can impose fines and restrictions on banks that breach its rules if necessary.
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