Sterling Money
Market Operations

Information on Outright Bond Purchases

As part of the Bank's reformed framework for implementing monetary policy, the Bank announced in May 2006 that it intended to provide longer-term finance to the banking system via outright purchases of gilts and high-quality foreign-currency government bonds (with the foreign currency cash flows swapped into fixed-rate sterling). In each case the operations would be carried out across a new electronic system, "Btender". Provision of reserves via bond purchase operations would replace part of the Bank's provision of reserves via short and long-term repos.

Joint statement by the Bank and the UK Debt Management Office (DMO) (13k)
15 May 2006

In July 2006 the Bank issued a consultative paper on the proposed outright purchases.

Consultation on outright purchases (188k)
July 2006

In the light of comments on the consultative paper, the Bank issued a Market Notice in November 2006 setting out the framework that it was minded to adopt for bond purchases.

The Bank has been using Btender for its routine repo OMOs since November 2007. The first gilt-purchase OMO was held in January 2008. The final stage of the work is the preparations to buy foreign currency bonds on a swapped basis. That is scheduled for implementation later in 2008.

Gilt Lending

The Bank intends in due course to lend from its gilts portfolio.

Lending of the Bank of England’s gilts portfolio (11k)
The Bank's Statement
28 January 2008

Pilot Group Discussions

The Bank established a Pilot Group with market participants to obtain informal feedback on the detailed implementation of Btender and the new operations.

	Discussion points from Pilot Group, 19 March 2007 (99k)
	Discussion points from Pilot Group, 29 January 2007 (16k)
	Discussion points from Pilot Group, 12 December 2006 (24k)
	Slides from seminar on 29 November 2006 (2mb)
	System screenprints from seminar on 29 November 2006 (644k)
	Discussion points from Pilot Group, 2 November 2006 (191k)