Bank of England will pump extra £5bn |
The Bank of England will put an extra £5 billion into the financial system to boost liquidity and today hinted it may re-consider the type of assets UK banks can use as collateral.
Today’s move follows a meeting between Governor, Mervyn King, and the head of the UK’s five leading financial institutions who are seeking more funds and flexibility on the securities they can use to borrow from the Bank of England.
The Bank of England’s announcement sent the London inter bank offer rate (Libor), the rate banks charge to lend to each other, down from 5.95 per cent to 5.93 per cent.
The Bank made it clear today that it will not alter the type of assets it will accept to lend to financial institutions in April after increasing the securities banks can borrow against in December to include highly-rated residential mortgage-backed debt.
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Added on 08/04/2008 20:45:30
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