Further details about Bank of England operations in the money markets (until May 2006) data

In its operations in the sterling money markets the Bank aims to implement monetary policy while meeting the liquidity needs, and so contributing to the stability of, the banking system as a whole. These data relate to the instruments through which the liquidity was supplied by the Bank in its market operations, before they were reformed in May 2006 and, to the change in settlement banks’ operational balances at the Bank, which were seen as the fulcrum of the system.


The data were compiled by the Bank of England.


The market’s need for refinancing from the Bank depends on transactions between the Bank and all other participants, including the commercial banks and their customers. Following the transfer of responsibility for Exchequer cash management from the Bank to the Debt Management Office in April 2000, the market’s need for refinancing from the Bank is principally determined by the following three factors:

  • the maturing stock of refinancing;
  • changes in the note circulation;
  • other movements across the Bank of England’s balance sheet.

Bank bills: comprise commercial bills which are payable in sterling and have been accepted by a bank whose bills are eligible for discount at the Bank of England.

Eligible bankers' acceptances (from 15/9/03): The eligible debt security (EDS) equivalents of bills of exchange issued into Crest by a bank on the Bank's current list of eligible banks; and which meet the other requirements for eligible bankers' acceptances as set out in the Bank's current notice on the requirements for eligible banks and eligible bankers' acceptances. An eligible debt security is defined in the Uncertificated Securities Regulations 2001, as amended. On 27 August 2003 the Bank announced that, subject to transition arrangements, it would no longer accept in its operations so called bank-on-bank bills (bills where both the issuer and acceptor are banks).

Local government bills: the Bank also buys outright and on repo eligible local government bills; such purchases are in practice rare.

Other sterling debt: comprises Treasury bills and bonds denominated in sterling issued by other central governments in the European Economic Area and the major international institutions.

Euro debt: comprises Bank of England euro bills and notes and bonds denominated in euro issued by central governments and central banks in the European Economic Area and the major international institutions, where they are eligible for use in ESCB monetary policy operations.

Interim reform: from 14 March 2005 the Bank stopped buying bills outright in its operations, and removed bankers’ acceptances from its list of eligible collateral. 

3.30pm overnight repos: incurred an interest rate 100 basis points above the Bank's repo rate (25 basis points from March 2005).

3.30pm deposit facility:remunerated at 100 basis points below the Bank's repo rate (25 basis points from 14 March 2005).

Valuation and Breaks

On 15 October 1998, the Bank announced an extension to the range of securities it would accept in its daily repo operations to include securities denominated in sterling and euro issued by the central governments and central banks of the European Economic Area countries and major international financial institutions. 

On 27 June 2001, the Bank introduced a daily collateralised liquidity withdrawal facility (in effect, an overnight deposit facility) to its open market operations. It is designed to moderate any undue softness in overnight market interest rates. It complements the existing facility the Bank already extends at the end of each day to lend overnight in order to moderate any undue tightness in overnight rates. The deposit facility thus puts the Bank's overnight operations at the end of each day on a symmetrical basis and helps to moderate volatility in either direction in overnight rates. Like the existing overnight lending facility, the deposit facility is available at 3.30 pm to the Bank's money market counterparties.

This page was last updated 03 October 2018

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