By Ben Westwood of the Bank’s Sterling Markets Division.
The Bank of England recently initiated a new survey of the sterling money market on behalf of the Money Market Liaison Group. This market — where short-term wholesale borrowing and lending in sterling takes place — plays a central role in the Bank’s pursuit of its monetary and financial stability objectives. Participants include banks, other financial institutions and non-financial companies, who use the market to manage their liquidity, by investing over short periods and raising short-term funding. The survey supplements the Bank’s long-standing gathering of market intelligence and will increase public understanding of the market. Over time, it is expected to help identify emerging structural trends in the market, helping policymakers assess the impact of their actions on the behaviour of market participants. This article introduces and presents the results of the inaugural survey launched in May 2011.