Home/Forex News Round Up

Bank of England to Prop up Banks amid ‘Brexit’ Fears

Share Print 0

The Bank of England is to offer extra liquidity to U.K. banks in the weeks running up to the referendum on Britain’s membership of the European Union in an effort to pre-empt any shocks to financial markets around the time of the vote.

The U.K.’s central bank said it would offer three “additional Indexed Long-Term Repo operations” (ILTR) or a market wide auction of central bank reserves in the weeks around the EU referendum.

This means the BoE will offer to exchange less liquid bank assets for cash, without limitation, allowing banks a cash buffer for six months at cheaper rates.

The Bank already offers ILTR operations to banks and building societies every month, but the extra auctions means lenders will have access to billions of pounds of extra liquidity, with four auctions now taking place around the vote in June.

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
, , , , , ,
Back to Top