Innovations in the Bank's provision of liquidity insurance via Indexed Long-Term Repo (ILTR) operations

Quarterly Bulletin 2015 Q2 articles
Published on 18 June 2015

By Tarkus Frost, Nick Govier and Tom Horn of the Bank’s Sterling Markets Division.

The Bank’s liquidity insurance facilities have been consistently improved since the onset of the financial crisis. The most innovative of these facilities is the Indexed Long-Term Repo (ILTR). In designing the ILTR, the Bank has drawn on lessons from auction theory. A key feature is that the provision of liquidity via the ILTR adjusts automatically to increases in demand caused by liquidity stresses in the financial system.

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