What is the new Bank of England short-term lending facility?
The Bank of England has created a new short-term lending facility that allows banks to borrow cash in exchange for bonds they own, in its latest attempt to stop a fire sale of assets by pension funds from reigniting.
Here is a look at how the new “repo” facility works and what BoE officials hope to achieve.
What is the new programme?
The repurchase or repo market serves as a vital lubricant in the daily functioning of global finance, allowing investors to raise cash by taking out a short-term loan against the assets they hold.
This story originally appeared on: Financial Times - Author:Nikou Asgari
