In January 2009, the Chancellor of the Exchequer authorised the Bank to set up an Asset Purchase Facility (APF) to buy high-quality assets financed by the issue of Treasury bills and the DMO’s cash management operations. The aim of the Facility was to improve liquidity in credit markets. The Chancellor also announced that the APF provided an additional tool that the Monetary Policy Committee (MPC) could use for monetary policy purposes. When the APF is used for monetary policy purposes, purchases of assets are financed by the creation of central bank reserves. Further information can be found in the Red Book:
Red Book - Chapter VIII - Quantitative Easing
In line with the MPC’s most recent decision in relation to the asset purchase programme, the APF has purchased £375 billion of assets by the creation of central bank reserves. The APF continues to operate its corporate facilities, with purchases financed by the issue of Treasury bills and the DMO's cash management operations.
The Asset Purchase Facility transactions are undertaken by a subsidiary company of the Bank of England – the Bank of England Asset Purchase Facility Fund Limited (BEAPFF). For more information on the impact APF purchases have on the Bank of England’s balance sheet see Balance Sheet impact
The table in the document below summarises the operations currently undertaken by the Bank, including some of the operational parameters:
Summary of current Bank of England's operations in the sterling money markets