Statement from the Governor of the Bank of England, Mark Carney, and incoming Governor, Andrew Bailey

Statement about the coordinated central bank action to enhance the provision of global U.S. dollar liquidity
Published on 15 March 2020

Today’s coordinated action by major central banks will improve global liquidity by lowering the price and extending the maximum term of U.S. dollar lending operations. These new operations will help ease strains in global funding markets, thereby supporting the supply of credit to households and businesses.

This action complements other steps being taken by central banks and other national authorities, including the comprehensive and timely package of measures launched by the Bank of England last Wednesday. These measures, reinforced by targeted fiscal actions such as in the UK budget, will help economies to bridge the disruption from an economic shock that could prove sharp and large, but should be temporary.

Major UK banks are well able to withstand severe market disruption. They hold £1 trillion of high-quality liquid assets.  The Bank of England has operations in place to make loans to banks in all major currencies on a weekly basis. Banks have already pre-positioned collateral with the Bank of England enabling them to borrow around £300 billion through these facilities. The FPC and PRC expect that all elements of banks’ capital and liquidity buffers can be drawn down as necessary to support the UK economy through this challenging but temporary shock.

Notes to Editors

  1. The handover from Governor Carney to Governor Bailey occurs at 12am Monday 16 March