Bank of England Market Operations Guide: Our tools

Further detail on the market-wide operations and facilities we use to achieve our monetary policy and financial stability objectives

In this section

Our tools - how we use our balance sheet to achieve our objectives

Overview

This section of our Market Operations Guide provides more detail on the market operations we use to achieve our monetary policy and financial stability objectives. It also covers how firms can apply for access and make use of them. Our ‘open for business’ approach means that where eligible firms meet our supervisory threshold conditions and have appropriate collateral, they can apply for access to our facilities. 

Table A: Our sterling lending facilities at a glance

  Facility Purpose Terms

Regular

Short-Term Repo

A source of reserves for payments and precautionary reasons
  • Weekly operation
  • One-week term
  • Reserves lent
  • Priced at Bank Rate
  • Against Level A collateral

Indexed Long-Term Repo

A source of reserves for payments and precautionary reasons
  • Weekly operation
  • Six-month term
  • Reserves lent
  • Auction prices
  • Against Level A, B, or C collateral

On-demand

Operational Standing Facility

A tool to manage liquidity demand shocks, such as short-term payment frictions
  • On demand
  • Reserves lent (or deposited)
  • Overnight transaction
  • Against Level A collateral

Discount Window Facility

A bilateral source of highly liquid assets for the purposes of liquidity management
  • On demand
  • Rollable 30-day term (five days for CCPs)
  • Gilts or reserves lent
  • Against Level A, B, or C collateral

Contingent

Contingent Term Repo Facility 

A contingent source of reserves in a scenario of actual or prospective market-wide stress
  • Triggered by the Bank
  • Flexible term
  • Reserves lent
  • Flexible pricing set by the Bank at activation
  • Against Level A, B or C collateral

Contingent Non-Bank Financial Institution Repo Facility

A contingent source of cash to address episodes of severe gilt market dysfunction
  • Triggered by the Bank
  • Flexible term
  • Source of cash
  • Flexible pricing set by the Bank at activation
  • Against a subset of Level A collateral

Operational readiness

Operational readiness and resilience are areas of importance for us. For example, the PRA issues guidance and rules for the firms it regulates concerning this. As part of our role in markets, we undertake our own work to ensure that we are operationally ready and resilient. We conduct regular testing across a range of different market activities, on an ongoing basis.

How to be ready to participate in Bank operations

  • Test all facilities you are signed up to regularly to ensure you are ready to use them, and you are familiar with both systems and settlement processes.
  • Ensure multiple users maintain access to, and familiarity with, our electronic trading system (Btender) and the Collateral Management Portal (CMP) to facilitate straight through settlement and management of securities collateral.
  • Familiarise yourself with the Bank’s collateral framework, eligibility criteria and haircuts.
  • Plan ahead of collateral pre-positioning; in particular for loan pools and securities which require time to complete the due diligence process.
  • Be aware that you can choose to net cash payments in the Bank’s operations, making settlement more efficient.
  • Refer to the operational and pre-positioning guides.

See Information for participants and the Sterling Monetary Framework (SMF) Operating Procedures for further information on how to align processes with the Bank’s requirements.

Regular testing of the Bank’s facilities is crucial for maintaining operational readiness, and helps to identify potential issues. The Bank expects participants’ own risk frameworks to mandate frequent testing. Participants are currently required to test their access to SMF lending facilities (STR/ILTR and DWF) at least every two years. The Bank may update its testing requirements, may request additional tests, and will accommodate testing requests from participants where possible.

Submitting bids in our market operations

SMF open market operations and Asset Purchase Facility (APF) auctions are conducted using our electronic auctioning system, Btender. If Btender is unavailable, announcements will be made via our SMF wire services page and our APF wire services page. If you experience issues accessing Btender, please contact the Sterling Desk.

Our expectation is for firms to use Btender in all circumstances to minimise operational risk. Where this is not possible, firms may submit proxy bids.

If a proxy bid is required: on auction day, firms should:

  1. Call +44 (0) 20 3461 5000 to confirm the bid.
  2. Then email: proxybids@bankofengland.co.uk, including the name of the auction in the subject header field when submitting their proxy bid.

Alternatively, firms may submit proxy bids via a pre-existing Bloomberg IB chat room with the Sterling Desk. To set up an IB with the Sterling Desk, please contact your relationship manager or email Markets-SMDDealers@bankofengland.co.uk.

Firms should allow sufficient time before the end of the auction window to allow proxy bids to be processed by the Bank. All proxy bids will be processed on a best endeavours basis, and at the risk of the participant.

We reserve the right to take further steps to confirm firm eligibility, and verify the identity of submitting dealers, before accepting proxy bids. We accept no liability for delays arising from such checks.

Managing risk

When we lend to firms, we naturally incur risk. To protect public money, we manage the risk incurred by our SMF facilities in three ways: 

  • First, by applying appropriate eligibility criteria. To be eligible to participate in the Bank’s operations, firms must be subject to robust supervisory oversight by the Prudential Regulation Authority (PRA) or a comparable prudential regulator. This oversight provides an important assurance that we are lending only to firms that meet minimum prudential standards. 
  • Second, by applying collateral requirements. When we lend through our facilities, we manage our counterparty risk to the borrower by securing our lending against collateral posted by the borrowing firm. That collateral is subject to prudent haircuts. 
  • Third, the Bank must limit the risk that the terms on which it supplies reserves reduces incentive for firms to appropriately manage their own liquidity risk, or that the Bank’s operations disintermediate private markets. We do so by operating via a framework that delivers an appropriate balance between liquidity provision directly through the Bank’s facilities and indirectly through core markets, whose resilience in normal times and in stress is critical for monetary and financial stability. 

Other facilities that do not fall under the SMF have appropriate eligibility criteria to manage the risk they incur.

Who can apply for access to our facilities

Compared with many central banks, access to our operations is open to a relatively wide set of eligible financial firms. Our eligibility criteria apply by type of firm.

We assess whether a particular group of firms should be eligible to participate based on key considerations that include:

  • Their critical importance to the financial system;
  • The extent of overnight liquidity risk they run in their business;
  • Whether they are subject to appropriate regulatory scrutiny.

If we judge a category of firm to be eligible for access to the Bank’s facilities, then all firms within that category are eligible to apply. Eligible firms can apply only if they individually meet the PRA's threshold conditions for authorisation (or a comparable test where firms are not PRA-regulated, including participants in the Contingent Non-Bank Financial Institution Repo Facility), and the operational and other requirements set out in our Terms and Conditions and Operating Procedures.

Participating in our operations is generally voluntary, and eligible firms can choose which operations they sign up to. The only exception is if a firm is a direct settling participant of the sterling high-value payment and securities settlement systems ‘CHAPS’ or ‘CREST’. Eligible firms that meet this criterion must hold a reserves account. These are normally coupled with access to our Operational Standing Facility (OSF), which is a key tool for managing reserves balances on an intra-day basis. This is necessary to ensure participation in CHAPS and CREST can occur safely. 

Table B: Which types of firms can participate in our operations

 

Reserves accounts Operational Standing Facilities Discount Window Facility Indexed Long-Term Repo Short-Term Repo Contingent Term Repo (if activated) Non-sterling facilities APF asset purchases & sales Contingent NBFI Repo (if activated) Alternative Liquidity Facility

Banks/building societies

 yes yes yes yes yes yes yes yes no yes
Broker-dealers yes yes yes yes yes yes yes yes no no
Central counterparties  yes yes yes no no no no no no no
International Central Securities Depositories yes yes no no no no no no no no

Non-Bank Financial Institutions(a)

 no  no no no no no no no yes no

(a) Insurance companies; defined benefit occupational pension schemes; and Investment Funds or sub-funds thereof whose investment strategy seeks to match the sensitivity of its assets to UK interest rates or inflation to that of its investors’ pre-defined liabilities (‘LDI funds’).

Participation is also subject to a range of legal and operational requirements. For instance, if a firm is part of a wider legal group structure, we may ask for a guarantee from another firm within that group. 

We also expect participants to give us enough information to manage risks effectively and require all participants to act in a way that is consistent with our objective of achieving competitive and fair sterling markets. Among other things, this can involve contributing to our market intelligence work.

Collateral requirements

When we lend through our facilities, we require collateral in return. The collateral must be of sufficient quality and quantity to protect our balance sheet from any risk of a counterparty failing to repay what it owes. If this does happen, we can sell or retain the collateral to cover our loss. 

The collateral we ask for varies in quality, and not all collateral is eligible for all the facilities we offer. 

Eligible collateral for our lending facilities

We accept a broad range of collateral, split into three buckets in terms of liquidity: 

  • Level A collateral consists of assets expected to remain liquid in almost all market conditions, such as high-quality sovereign debt trading in very deep markets.
  • Level B collateral consists of assets that will normally be liquid, such as sovereign debt, supranational and private sector debt and the highest-quality asset-backed securities.
  • Level C collateral comprises typically less liquid assets, such as securitisations, securities delivered by the same entity that originated the underlying assets (‘own name’ assets) and portfolios of loans, such as mortgages. 

We do not normally accept equities as collateral for our facilities, but we have put in place the technical measures to do so at our discretion, should the need arise in the future. Participants wanting more information on this should contact us applications@bankofengland.co.uk.

Our SMF lending facilities provide a ‘liquidity upgrade.’ This means we allow firms to swap less liquid collateral for the most liquid asset in the economy, central bank reserves.

Each piece of collateral must pass formal due diligence before it is considered eligible. For securities, please see the full list of eligible ISINs – if a counterparty wishes for an ISIN to be added to this list they must submit a request to eligiblesecurities@bankofengland.co.uk.  For pools of loans, details on the eligibility process can be found in our loan pool prepositioning guide.

Table C: Collateral eligibility summary

Collateral level

A only

Short-Term Repo

Operational Standing Facilities

Contingent Term NBFI Repo Facility (gilts only - conventional and index-linked, including unconventional gilts such as strips)

A, B and C[1]

Indexed Long-Term Repo

Discount Window Facility

Contingent Term Repo Facility

Non-sterling Repo facilities

Term Funding Scheme with additional incentives for SMEs

Collateral haircuts

Our list of eligible collateral is broad. It extends in principle to any asset we judge we can effectively and efficiently risk manage, subject to an appropriate discount applied to the market value of the asset. This ‘haircut’ is designed to protect us against falls in the value of collateral, so if a counterparty defaults, the sale of that collateral raises at least the amount borrowed against it, even in the most adverse market conditions. Higher quality assets offer us greater protection against asset value volatility, and so require lower haircuts. 

We publish 'base haircuts' for Level A, Level B, and Level C securities.

Haircuts for Level C loan collateral are calculated for each pool of loans individually. Whilst the approach to assessing each pool of loans is consistent across all firms, haircuts will vary dependent on each pool to reflect each pool’s bespoke risk characteristics. 

We may choose to apply ‘add-ons’ to address other risks that are specific to a particular counterparty or piece of collateral. Where possible, will always provide feedback to participants with the reason an add-on is in place. We periodically conduct qualitative and quantitative assessments of all haircuts, meaning they are subject to regular adjustments.

We strongly encourage firms to pre-position a broad range of collateral with us. This can include High Quality Liquid Assets (HQLA) where these are eligible for use as collateral, or come from their broader stock of eligible assets. Once satisfactory due diligence is complete, delivered eligible assets may be pre-positioned and subsequently may be drawn against. 

Pre-positioning allows us to risk assess, price, value collateral and set a suitable haircut in advance of drawdown, therefore allowing firms to use our liquidity facilities more quickly when needed. 

For certain types of collateral, such as corporate bonds, we may also require counterparties to give us collateral diversified across a number of issuers (known as a collateral ‘concentration limit’). 

Sterling Monetary Framework (SMF) operations

  • Reserves accounts are sterling-denominated instant access accounts offered to eligible financial firms that are held in our Real-Time Gross Settlement (RTGS) system. There is currently no maximum or minimum balance for most types of participant.[2]

    Reserves accounts are a vital tool for implementing monetary policy since we remunerate reserves balances at Bank Rate, which is set by our Monetary Policy Committee (MPC) eight times a year (roughly every six weeks).

    Bank Rate has historically been positive but could also be zero or negative. Under a negative Bank Rate, the Bank could also choose to apply more than one rate to reserves balances, in a system called tiered remuneration. More information on the operational arrangements for negative rates can be found in our SMF Operating Procedures.

    Setting Bank Rate helps us meet our inflation target. Additionally, firms that are subject to prudential liquidity requirements can count reserves balances as High Quality Liquid Assets (HQLA). Read more about regulatory requirements.

    Reserves accounts can also be used for settlement of payment flows in certain payment systems that settle through the Bank’s RTGS system. Balances held in this account can be used as a source of intra-day liquidity by settlement banks.

    For certain firms which are not eligible for reserves accounts, we can instead offer standalone settlement accounts, to enable direct participation in payments systems that use our settlement services. More information on settlement accounts is available in our Settlement Account Policy.

    Any balance held on a settlement account can be used intraday as liquidity for the settlement of payments. See Bank of England Settlement Accounts for more information on intraday liquidity. 

Regular facilities

  • The STR is our regular, market-wide sterling operation aimed at maintaining control of short-term market interest rates. Its terms help to ensure market participants have little need to pay above Bank Rate for reserves in sterling money markets. The STR is intended to be used freely by eligible firms to meet their demand for reserves. This has been confirmed by a PRA statement on the STR.

    For further information on the STR, see the Market Notice published on 1 September 2022.

    Key information
    Frequency STR operations are typically held weekly, each Thursday
    Term STR offers reserves for a one-week term to target short-term interest rates
    Drawing type Reserves, full allocation (there is no limit on the amount of reserves the Bank will lend per auction)
    Pricing STR is priced at Bank Rate
    Eligible collateral SMF Level A collateral
    Settlement T+0 (settles same day)
    Publication

    We publish the total aggregate use of STR (XLSX) soon after the close of each auction. We do not publish data regarding specific transactions or counterparties.

  • The ILTR is a regular, market-wide sterling operation, providing reserves for a six-month term against the full range of SMF eligible collateral via a competitive auction. As outlined in a June 2025 Market Notice, the Bank has calibrated the ILTR in line with its expanded role to supply the majority of the total stock of reserves necessary for monetary control and financial stability needs, which it will do alongside the STR.

    The ILTR is intended to be used freely by eligible firms to meet their demand for reserves. This has been confirmed by a PRA statement on the ILTR.

    Key information
    Frequency ILTR operations are typically held weekly, each Tuesday
    Term ILTR offers reserves for a six-month term
    Drawing type Reserves, via a competitive auction. The quantity of reserves available in each auction, and the price at which they are provided, is responsive to demand.
    Pricing ILTR prices are expressed as interest rates payable as a spread over Bank Rate. Auctions are priced using a ‘uniform’ price format - all successful bids will pay the same single price (clearing spread) for each given collateral set.
    Eligible collateral SMF Level A, B and C collateral
    Settlement T+2 (settles two days after the auction)
    Publication

    We publish the total aggregate use of ILTR (XLSX) soon after the close of each auction. We do not publish data regarding specific transactions or counterparties.

    How to participate effectively in the ILTR:

    Following this guidance will improve allocation and pricing outcomes for firms.

    • Expect clearing spreads to rise above minimum levels during the transition to a demand-driven operating framework.
    • Bid the maximum you are willing to pay.
    • Firms should access the ILTR regularly and distribute their demand across auctions.

    For more information on the purpose of the ILTR, how its competitive auction process works, and how to participate most effectively, please see Using the ILTR: guide for participants.

On-demand facilities

  • The OSFs are on-demand, bilateral facilities. They support firms in managing liquidity demand shocks, such as payment frictions, by allowing participants to borrow reserves against Level A collateral, or deposit reserves, at a fixed spread to Bank Rate. As with all SMF facilities, the OSFs are ‘open for business’ and should be used by SMF participants for the purposes of liquidity management.

    The OSFs also limit volatility in market interest rates by providing an alternative source of borrowing to our regular market-wide operations, thereby supporting short-term rate stability.

    Key information
    Frequency On-demand
    Term Overnight deposit or lending
    Drawing type Reserves
    Pricing Deposit: remunerated at 25 basis points below Bank Rate
    Lend: priced at 25 basis points above Bank Rate
    Eligible collateral SMF Level A collateral
    Settlement T+0 (settles same day)
    Publication

    We do not publish data on individual OSF transactions. We publish aggregate data on OSF drawings on the third Wednesday of the following maintenance period.

  • The DWF is a bilateral facility, allowing firms to borrow highly liquid assets (gilts and reserves) on demand, against the full range of SMF collateral.  As with all SMF facilities, the DWF is ‘open for business’ and should be used by SMF participants for the purposes of liquidity management.

    Provided participants meet PRA Threshold Conditions and have sufficient eligible collateral, there is a presumption that the Bank will lend via the DWF.[3] To meet PRA Threshold Conditions, firms are required to have an appropriate amount and quality of capital and liquidity, to have appropriate risk management frameworks in place, to conduct their business prudently, and to be capable of being effectively supervised by the PRA.

    Use of the DWF should be considered alongside a firm’s own liquidity buffers, and other private market sources of liquidity. However, there is no presumptive order of usage in terms of drawing down on liquidity buffers before the use of the DWF (or vice versa).

    Key information
    Frequency On-demand (drawing request should be received by midday) 
    Term Initial drawings for up to 30 days. Participants may roll drawings or repay early.
    Drawing type Gilts or reserves
    Pricing

    DWF fees (XLSX) vary from market rates in routine circumstances but offer SMF participants more affordable liquidity during less normal conditions. As illustrated in Chart 1, DWF fees are designed to: 

    • Reflect the type of collateral used;
    • Reflect the bespoke and bilateral nature of the lending;
    • Increase as the drawing size grows relative to the size of the firm;
    • Incentivise repayment when borrowings are no longer needed
    Eligible collateral SMF Level A, B and C collateral
    Settlement T+0 (settles same day)
    Publication

    We do not publish data on individual DWF transactions. We publish aggregate data on DWF drawings on the first Tuesday following the final working day of the calendar quarter, five quarters ahead. Our publication approach seeks to balance transparency with discretion about individual counterparty relationships, and to minimise any potential risks to financial stability through premature publication.

    Chart 1: DWF fees - pricing of eligible collateral as a proportion of eligible liabilities

Contingent facilities

  • The CTRF allows us to provide liquidity against the full range of eligible collateral at any time, term, and price. The Bank is able to activate the CTRF in response to any actual or prospective market-wide event. We take prevailing market conditions into account when we calibrate its terms, enabling us to respond to a market stress in a flexible way.

    Most recently, we announced the activation of the CTRF in March 2020, to help manage the market disruption caused by the outbreak of the Covid-19 pandemic. This was in place until June 2020. Further information can be found in Activation of the Contingent Term Repo Facility - Market Notice 24 March 2020. 

    We decide what information to publish about the facility’s usage when we activate it. This is normally in line with other facilities, e.g. we include total aggregate use of the facility following the close of the operation. 

  • Outside of the SMF, the CNRF opened for applications in February 2025. See Contingent Non-Bank Financial Institution Repo Facility (CNRF) for more information. 

Term funding

  • The TFSME was introduced in response to the Covid-19 crisis, and drawings peaked at £193 billion in October 2021. More information on the design and purpose of the TFSME is included in the March 2020 Market Notice.  

    We published a TFSME Market Notice, TFSME operating procedures and TFSME terms and conditions providing more details on the operation of the TFSME. 

    The TFSME is now closed to new drawings. Loans were offered over a period which ran from April 2020 to October 2021. TFSME loans are currently being repaid, with the majority of drawings due to mature in 2025. A small number of drawings were extended to align with HM Treasury’s Bounce Back Loans Scheme (BBLS).[4] Participants may terminate any transaction, in part or in full, before its maturity date. The interest rate on TFSME transactions is equal to Bank Rate plus a TFSME fee. 

    We publish the size of each Participants’ outstanding drawings, and each TFSME Group’s Base Stock and Net Lending data, quarterly with a lag. Details of aggregate TFSME drawings are also published weekly on our website. 

Asset purchases and sales

  • We hold a stock of government bonds purchased through the Asset Purchase Facility (APF) as part of quantitative easing (QE). This stock of assets is held on a segregated basis by a separate entity – the Bank of England Asset Purchase Facility Fund (BEAPFF), which is a wholly owned subsidiary of the Bank. 

    This stock of bonds is currently being reduced as QE is unwound via a programme of sales and maturities. Each September, the MPC sets the pace of unwind for the following 12 months. Please see our latest Market Notices for further information on the current pace of unwind.

    Key information - gilt sales
    Frequency The frequency of gilt sales is confirmed quarterly via a Market Notice. Gilt auctions typically take place on Mondays.
    Participants Direct participation in out auctions is open to Gilt-edged Market Makers (GEMMs)[5], who may act on their own behalf, or for their clients.
    Eligible gilts The gilts included in sales operations are confirmed on a quarterly basis via a Market Notice.
    Pricing We use a discriminatory price format for our auctions, where every successful participant pays the price they bid at.
    Allocation We rank offers received according to the attractiveness of the yield for the Bank, relative to the market yield of each gilt at the end of the auction. We keep doing this until we have reached the amount we wish to sell. There are no restrictions on the number of bids submitted, and no restriction on what proportion of each auction can be allocated to each gilt. See the 1 September 2022 Market Notice for more information.

Short-term non-sterling facilities

  • The Bank of England, the Bank of Canada, the European Central Bank, the Federal Reserve, the Bank of Japan and the Swiss National Bank have an established network of standing bilateral swap lines. These allow liquidity to be provided in each jurisdiction in any of the five currencies foreign to that jurisdiction, if the two central banks in a particular bilateral swap arrangement judge that market conditions warrant such action in one of their currencies. 

    To support our financial stability objective, we use these swap lines, supplemented by other arrangements if required, to offer short-term repo transactions with participating firms in selected other currencies, against the full range of collateral. The frequency of these operations is at our discretion, in agreement with the relevant central bank. The facility is currently run weekly for US dollars. 

    Non-sterling currency operations are only open to participants with access to the OMO facilities. This was confirmed in a Market Notice on 8 August 2022. 

    Key information
    Frequency US dollar repo operations are typically held weekly, each Wednesday
    Term US dollar repo offers non-sterling liquidity for a one-week term
    Drawing type Non-sterling currencies – currently US dollars
    Pricing US dollar repo is priced at the matched maturity US dollar overnight index swap (OIS) rate plus 25 basis points
    Eligible collateral SMF Level A, B and C collateral
    Settlement T+0 (settles same day)
    Publication

    We publish the total aggregate use of our non-sterling currency operations on our website soon after the close of each auction. We do this for each currency, currently US dollar (XLSX), and previously for Euro (XLSX). We do not publish data regarding specific transactions or counterparties.

Non-interest-bearing facilities

  • The ALF is a fund-based sterling deposit facility available to UK banks that face formal restrictions on engaging in interest-bearing activity.    

    Deposits in the ALF are backed by a portfolio of high-quality eligible assets. These deposits and backing assets are held on a segregated basis by a separate entity – the Bank of England Alternative Liquidity Facility Limited (BEALF), which is a wholly owned subsidiary of the Bank. 
    Returns generated from the backing fund may be passed back to depositors in lieu of interest, net of hedging and operational costs. 

    The ALF gives its participants greater flexibility in meeting regulatory requirements under Basel III prudential rules.  This is because deposits in the ALF are treated as Level 1 HQLA for the Liquidity Coverage Ratio (LCR) under the Capital Requirements Directive and Capital Requirements Regulation. 

    For further information, please see the ALF Operating Procedures. If you are an eligible firm with restrictions on interest-bearing activity, find out more about applying to join the ALF on Information for applicants. 

    Operation of the Alternative Liquidity Facility (ALF)

    Key information
    Frequency ALF operations are typically held weekly, each Thursday
    Term ALF deposits are placed into the facility for seven days. Firms are able to withdraw up to once per day during business hours (apart from on auction days)
    Size Up to £200 million of deposits will be accepted in aggregate across all participants
    Allocation Participants have a base deposit amount, calculated using factors such as liquidity data from submitted regulatory returns. The base deposit amount for each participant is kept under review and may change over time. Bids above this amount can be submitted, and will be allocated from any available spare capacity using a weighting mechanism. Participants are also able to bid below their base deposit amount.
    Settlement T+0 (settles same day)
    Publication

    We publish monthly average aggregate data on ALF usage, with a one quarter lag. We do not publish data regarding specific transactions. We also publish the list of assets composing the ALF backing fund (PDF).

Historic facilities and schemes

We have previously launched a number of temporary facilities and schemes to help us to achieve our monetary and financial stability objectives. This section details facilities and schemes that were launched after 2012 but have now been closed to new drawings and any stock or transactions have since matured. 

  • Purchases

    The Corporate Bond Purchase Scheme (CBPS) was introduced in 2016, as a monetary policy tool. It aimed to impart monetary stimulus by lowering the yields on corporate bonds, thereby reducing the cost of borrowing for companies. 

    A £10 billion portfolio of non-financial investment grade corporate bonds was purchased via the Asset Purchase Facility (APF), with purchases beginning in September 2016. In March 2020, the MPC decided to expand the portfolio to £20 billion as part of a package of measures announced in response to the Covid-19 crisis. 

    The scheme aimed to purchase a balanced portfolio of corporate bonds across eligible issuers and sectors, ensuring a representative portion of the market, so as not to influence the allocation of credit to particular firms or sectors of the economy. To maximise the effectiveness and efficiency of the economic stimulus, purchases were limited to investment-grade bonds issued by companies that made a material contribution to economic activity in the UK. 

    In November 2021, the Bank announced it would adjust the portfolio to support the transition to net zero, whilst maintaining its monetary policy purpose. The Bank set out high-level principles that would be used to guide the transition, these were actioned via four tools: targets, eligibility, tilting and escalation.

    Sales

    At its February 2022 meeting, the MPC asked the Bank to design a programme for selling corporate bonds held in the APF, with the stock of holdings to be fully unwound no earlier than towards the end of 2023. Sales began in September 2022 and were concluded in June 2023. A small portfolio of very short maturity bonds were held after sales concluded, and fully matured by early April 2024. 

    Key statistics 

    • £10 billion of corporate bonds were purchased between October 2016 and April 2017. Reinvestment operations took place between September and October 2019 to reinvest the proceeds from maturing bonds.
    • A further £10 billion of corporate bonds were purchased between April 2020 to October 2020 to bring the total stock to £20 billion. Further reinvestment operations took place between November 2021 and January 2022 to reinvest proceeds from maturing bonds. At its peak, the portfolio comprised 342 bonds, across 115 issuers.
    • Sales operations began in September 2022 and concluded in June 2023.

    A full time series of the weekly stock of holdings in the CBPS is available in our database.  

  • Purchases

    Between 28 September and 14 October 2022, in line with its financial stability objective, the Bank conducted temporary and targeted purchases of index-linked and long-dated conventional UK government bonds (gilts). The purpose of these purchases was to act as a temporary backstop to restore orderly conditions in index-linked and long-dated gilt markets, reducing risks from contagion to credit conditions for UK households and businesses. 

    The Bank purchased £19.3 billion of gilts, of which £12.1 billion were long-dated conventional gilts and £7.2 billion were index-linked gilts. These were held within a segregated portfolio of the Asset Purchase Facility.

    Further details of the Bank’s financial stability gilt purchases can be found here:

    Sales

    The Bank began unwinding these gilt purchases on 29 November 2022, consistent with its commitment that its intervention would be temporary The Bank ran a series of reverse enquiry windows during which eligible counterparties could bid for the gilts held in the portfolio. This approach allowed the Bank to meet demand for gilts where it existed, while limiting the impact of sales on wider market conditions. Further details of the demand-led sales approach can be found in the November 2022 news release. 

    As confirmed in the January 2023 news release, the Bank announced that it had completed its sales of the £19.3 billion portfolio of temporary holdings of UK government bonds.

    Data on the value of each of the bonds purchased is available below:

    See a detailed breakdown of the results of the gilt sales (on a trade date basis): Financial stability gilt portfolio sales results (XLSX).

    Temporary Expanded Collateral Repo Facility (TECRF)

    On 10 October 2022, and in line with its financial stability objective to avoid dysfunction in core funding markets, the Bank launched the Temporary Expanded Collateral Repo Facility (TECRF). The facility enabled banks to help ease liquidity pressures facing their client LDI funds through liquidity insurance operations. The facility closed on 10 November 2022.

    See the full news release where the Bank of England announces additional measures to support market functioning. 

    Following the facility’s closure, the Bank published aggregate usage of the TECRF: Temporary Expanded Collateral Repo operational results (XLSX).

     

  • In conjunction with HM Treasury, we launched the CCFF in March 2020, during the Covid-19 crisis. The CCFF offered funding to large employers who would normally raise funds through the financial markets. 

    The aim of the CCFF was to help businesses bridge disruption to their cashflows as a result of the Covid-19 economic shock. By lending to large companies directly, the CCFF protected the space for banks to lend to the wider population of companies, complementing other Bank of England and Government schemes at the time. 

    Funding was made available through the purchase of short-term debt in the form of commercial paper. Participating companies could offer commercial paper to the CCFF with a maturity of one-week to twelve months in daily operational windows. The CCFF offered funding at prices comparable to those prevailing in markets in the period before the Covid-19 economic shock. Commercial paper was purchased at a spread above a reference rate, based on the current sterling overnight index swap (OIS) rate. The spread offered was dependant on the company’s credit rating.

    To be eligible, companies had to be large employers in the UK or play an important role in our economy. They also needed to have been in sound financial health before the Covid-19 shock. Financial companies and public authorities were not able to apply. From May 2020, for purchases of any commercial paper maturing after May 2021, companies had to commit to restraints on their capital distributions and senior pay. 

    The CCFF closed to new purchases in March 2021 and all commercial paper matured or was sold back to the issuer by March 2022. 

    Key statistics 

    • The CCFF lent more than £37 billion to 107 different companies. In May 2020, there was over £20 billion worth of commercial paper held by the CCFF. 
    • Over 230 companies signed up to the facility, with a peak combined borrowing capacity of over £85 billion. These companies were responsible for almost 2.5 million jobs in the UK at the time. 

    A full time series of commercial paper purchases, and net amounts outstanding in the CCFF is available in our database. See a firm-level, weekly account of outstanding commercial paper held by the CCFF: CCFF more detailed data (XLSX). 

  • In August 2016, the MPC introduced a Term Funding Scheme (TFS). Its primary objective was to reinforce the pass through of Bank Rate cuts to the interest rates faced by households and businesses in the wider market. This allowed the reduction from 0.5% to 0.25% to have broadly the same impact as cuts made when rates were further from zero. The design of the scheme reflected this primary objective, and it was calibrated so that the reduction in Bank Rate could have a broadly neutral impact on lenders’ margins in aggregate. 

    The TFS provided four-year funding to eligible firms, in the form of central bank reserves, at rates close to Bank Rate, and against the full range of eligible collateral. This helped it meet its objectives in broadly two ways. First, by giving access to a significant amount of funding at rates at or close to Bank Rate, the TFS directly lowered average funding costs, allowing that reduction to be passed on to borrowers. Second, indirect funding costs were reduced, as the TFS reduced the amount of debt that lenders would need to issue in the market. 

    The price and amount of funding available was linked to the quantity of participants’ net real economy lending over a reference period. The TFS was originally launched with a government indemnity. However, in January 2019, after we received a capital injection from the Government, all loans (and their backing collateral) were transferred from the Asset Purchase Facility (APF) to the Bank’s balance sheet.

    The TFS is now closed to new drawings. Loans were offered from September 2016 to February 2018. The final TFS drawings were repaid in February 2022. Further information on how the TFS was operated (PDF). 

    Key statistics 

    • The scheme offered £127 billion of loans across the drawings period. 
    • A total of 62 banks and building societies drew from the TFS. Of these, 54 participants delivered positive net lending between July 2016 and December 2017 and as a result qualified for a lower interest rate on their borrowings. 

    A full time series of aggregate drawings, repayments and maturities for the TFS is available in our database. See a quarterly account of total TFS drawings by firm: TFS more detailed data (XLSX). 

  • In conjunction with HM Treasury, we launched the FLS in July 2012, during the euro area debt crisis. The crisis caused a sharp increase in bank funding costs, impairing the flow of credit around the UK banking system. 

    Our objective was to encourage lending to households and companies. The scheme did this by providing funding to banks and building societies for an extended period, at below market rates, with both the price and quantity of funding provided linked to their performance in lending to the UK real economy. 

    We subsequently revised the design and extended the availability of the FLS in April 2013. We did this to increase the incentives for banks to lend to small and medium-sized enterprises. We announced further extensions in December 2014 and in November 2015. 

    The FLS is now closed to new borrowers. Loans were offered from August 2012 to January 2018. The final FLS loans were repaid in September 2021. Further information on how the FLS was operated (PDF). 

    Key statistics 

    • Total outstanding FLS drawings reached a peak of nearly £39 billion in September 2016. 
    • Just under 50 banks and building societies signed up to the facility and had a combined borrowing allowance of over £70 billion. Of those who signed up, around 40 drew from the scheme. 

    A full time series of aggregate net drawings from the FLS is available in our database. 

    See a quarterly account of total FLS drawings by firm: FLS more detailed data (XLSX). 

  1. Except for central counterparties (CCPs) and international central securities depositories (ICSDs), which are not permitted to use Level C assets as collateral.

  2. Except for central counterparties (CCPs) and International Central Securities Depositories (ICSDs), which are required to maintain a pre-agreed average target balance for each maintenance period.

  3. As set out in the PRA & FCA Threshold Condition Factsheet.

  4. As set out in the 11 March 2020 Market Notice.

  5. United Kingdom Debt Management Office: Gilt-edged Market Makers.

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This page was last updated 10 June 2025