Paul Fisher highlights that the Bank of England intervenes routinely to implement monetary policy operations and provide liquidity insurance to the banking system. He emphasises that these responsibilities do not give it a mandate or the ability to “…provide a source of long-term funding for the commercial banking system” and that it does not “… have access to funds that could be used to sustain commercial lending operations.” In relation to the Special Liquidity Scheme (SLS), Paul Fisher notes that it provided a temporary collateral upgrade for banks allowing them to obtain funding from the market. He reiterates that the SLS will close at end January 2012, by which time SLS participants should be funding their balance sheets in the market by other means.
Published on
18 February 2010
Press release