Bank of England Introduces Contingency Liquidity FacilityDecember 6, 2011 @ 7:44 AM EST
Europe Update: Bank of England Introduces Contingency Liquidity Facility
Although there is currently no shortage of short-term sterling liquidity in the market, the Bank of England has introduced a new contingency liquidity facility, the Extended Collateral Term Repo (''ECTR'') Facility.
The lending facility is designed to reduce risks to financial stability that could develop from a shortage of short-term sterling liquidity.
StreetAccount notes that should a sterling shortage develop, the new Facility gives the BOE the flexibility to offer sterling liquidity in an auction format against the widest range of collateral.
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