The Bank and HM Treasury launched the Funding for Lending Scheme (FLS) on 13 July 2012. The FLS is designed to incentivise banks and building societies to boost their lending to the UK real economy. It does this by providing funding to banks and building societies for an extended period, with both the price and quantity of funding provided linked to their lending performance.
The FLS allows participants to borrow UK Treasury Bills in exchange for eligible collateral, which consists of all collateral eligible in the Bank’s Discount Window Facility.
The Bank and HM Treasury announced an extension to the FLS on 24 April 2013, which was amended on 28 November 2013, on 2 December 2014 and on 30 November 2015. This allows participants to borrow from the FLS until January 2018, with incentives to boost lending skewed towards small and medium sized enterprises (SMEs).
Usage and net lending data relating to the extension to the FLS can be found here.
News Release: Bank of England and HM Treasury Funding for Lending Scheme - 2015 Q4 Usage and Lending data
3 March 2016
A Quarterly Bulletin article explains how the FLS will support the economy in more detail.
The Funding for Lending Scheme
2012 Q4 Quarterly Bulletin article
The below document answers some frequently asked questions about the Funding for Lending Scheme (FLS).
The Funding for Lending Scheme - Frequently Asked Questions