Minutes of Money Market Committee meeting – November 2022

Minutes

Item 1 – Welcome

The Chair thanked members for attending and confirmed that the Minutes of the July 2022 meeting had been published on the Bank’s website.^{footnote [1]}

The Chair expressed the Committee’s gratefulness to members who had since left the Committee, and welcomed new members. The Chair also welcomes those who were attending as observers as part of the Bank’s Meeting Varied People (MVP) initiative.

Item 2 – Discussion on market conditions

A broad update on developments and conditions in global markets was presented by a member of the Committee, highlighting developments including the potential impact of fiscal policy on inflation; the recent Liability Driven Investment (LDI) deleveraging; and the likely path of Quantitative Tightening (QT) beyond the near term.

The Committee discussed market conditions, focusing on a wide range of topics including the potential balance of demand and supply in gilt markets over coming years; and the likely trajectory for LDI collateral buffers towards a ‘new normal’.

There was wide agreement that the introduction of tiered remuneration of Bank of England reserves – around which there had been media speculation – would be a negative outcome for monetary policy transmission because of the expected increase in demand for short-dated gilts that it could incentivise, which in turn may lower their yields and hence reduce the effective pass through of monetary policy.

Item 3 – AOB

The Chair thanked members for their time, and welcomed any suggestions for future agenda items to be sent to the Secretariat in due course.

The Chair confirmed that the next MMC was scheduled for 6 December 2022, to be hosted in person at the Bank of England.

Committee attendees

Gordon Lowson – ABRDN
James Winterton – Association of Corporate Treasurers
Michael Manna – Barclays Bank UK
Emma Cooper – BlackRock
Ina Budh-Raja – BNY Mellon
Romain Dumas – Credit Suisse
Marije Verhelst – Euroclear
Inna Shaykevich – Goldman Sachs
Vicky Worsfold – Guildford Borough Council
James Murphy – HSBC
Chris Brown – Insight Investment
Joe McConnell – J.P. Morgan Asset Management (alternate)
Ben Challice – J.P. Morgan
Tony Baldwin – LCH
John Wherton – Legal & General Investment Management
Peter Left – Lloyds
Laura Briggs – Lloyds (presenter)
Sandeep Ubi – Lloyds (presenter)
Nina Moylett – M&G
Jordan Broad – NatWest (alternate)
Nic Erevik – Newcastle Building Society
Avi Tillu – PIMCO
Alan Williams – Santander UK
Romain Sinclair – Société Générale
Lynda Heywood – Tesco PLC
John Argent – Tradition
Jessica Pulay – DMO (Observer)
Alan Barnes – FCA (Observer)
James Ridgwell – FCA (Observer)

Bank of England

Rhys Phillips (Chair)
David Glanville
Tom Archer
Grace Greer

Apologies

Olivia Maguire – J.P. Morgan Asset Management
Nina Moylett – M&G
Rachel Lane – NatWest
Jon Pyzer – Bank of England