The extension of the Bank of England's dealing relationships in the sterling money market.
As foreshadowed in the Bank of England's paper "The future structure of the gilt-edged market", published in April 1985, and in order to ensure continuing competition among its money market dealing counterparties, the Bank is willing to extend the range of counterparties with which it has a dealing relationship in the sterling money market. At present the Bank's money market dealings are conducted with eight discount houses, which act as providers of sterling liquidity to the commercial banks. This paper sets out the Bank's intentions for the extension of its dealing relationships, including the obligations, structure and supervision of the Bank's money market dealing counterparties; the facilities the Bank will offer these counterparties; and the criteria for acceptability. These arrangements have been developed with the help of comments received on the Bank's draft proposals published in June this year. The arrangements will be subject to continuing review and modification in the light of experience .