Bank of England surprises City by extending Special Liquidity Scheme
The Bank of England has announced a surprise extension to its Special Liquidity Scheme.
Last week, the Governor, Mervyn King, told the Commons Treasury Select Committee that the scheme would end as planned on 21 October. But in a statement yesterday, the Bank said the "window" for the banks to come to the Bank to swap unmarketable mortgage-backed securities for gilts would be extended to 30 January, because of "the current disorderly market conditions" and "to provide additional time for banks to plan their access to the scheme in an orderly fashion".
The scheme is though to have taken anything from £80bn to £200bn of mortgage-backed securities from banks, which they can swap for gilts on a rolling basis for up to three years. The Bank has come under increasing pressure to ensure that "Son of SLS", a liquidity insurance plan, would be equally generous, something the Bank had been reluctant to do for fear that it could be dragged into funding the UK banks' lending activities.
Michael Saunders of Citi European Economics said decision was a sensible one. "Some certainty over the availability of further long-term financing may also have been a key condition in order for the rescue merger of HBOS to proceed."
- 1 Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
- 2 Expert urges cat lovers to own just one animal each
- 3 Sainsbury's '50p challenge' poster telling staff to encourage customers to spend more placed in shop window instead of staff room
- 4 Yes, the iPhone 6 is a miracle, but it's Apple's tax affairs that deserve a double take
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...