Copy article

Bank of England statement and action

ended 20. March 2023

The Bank of England, in co-ordination with other central banks, has decided to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements. In line with this, the Bank will increase the frequency of 7-day maturity US dollar repo operations from weekly to daily, commencing 20 March 2023. You can read the full statement >> here <<. Any thoughts on this, send them over and we will issue to the media this AM.

6 responses from the Newspage community

Copy all

Copy

Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
The Bank of England is working with other central banks to ensure liquidity in the aftermath of the Credit Suiss debacle. Expect a lot of voting this week in the markets, particularly in the banking sector. It will be interesting to see how the last two weeks affects the Fed and Bank of England rate decisions later this week.
Copy

Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This is a hammer blow for the credibility of the mandate of the FCA. It cannot continue to increase rates for normal homeowners, under the remit of controlling inflation, whilst pumping billions of dollars into the system to save bankers, increasing inflation. The government needs to widen the remit or accept banks will go bust.
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
What is reassuring is that central banks have acted swiftly to the recent challenges, to provide security to the market, and the spiralling world interest rate increases will now need to stop. Countries need to find other ways to curb inflationary pressures, as increasing rates further may cause more enforced consolidation of lenders. The Bank of England has repeatedly stated that the UK Bank are in a very good position, with plenty of cash and liquidity, but overseas banks may still cause the UK a problem or two. Definitely squeaky-bum time, but the UK is sitting on a cushion of cash and it should be business as normal for mortgages.
Copy

Bradley Lay
Founder at Peak Capital Group
The Bank of England's stunning announcement to increase the frequency of 7-day maturity US dollar repo operations from weekly to daily, starting on 20 March 2023, has sent shockwaves through the global financial community, highlighting the ongoing concerns about the health of the global banking system. Recent failures of major US banks, including Silicon Valley Bank and Signature Bank, have exposed the vulnerabilities of the system to a wider audience. While the move to provide liquidity is a positive step, there are concerns that it may not be enough to address the deeper problem of systemic risk and the potential domino effect of major bank failures. The announcement may be seen as a signal of further instability to come in the global financial system.
Copy

Graham Cox
Director at Bridging Hub
This co-ordinated actions to provide banks with extra liquidity shows how worried Central Banks are about contagion and further bank runs. The danger is that the markets start targeting the next 'weakest' bank and the situation rapidly escalates into another global financial crisis. Hopefully, this can help stem the tide.
Copy

Amit Patel
Adviser at Trinity Finance
We have been here before, and sadly once again it's the ordinary people that will suffer. This clearly shows how nervous the central banks are about the global banking system and have put measures in place to ease liquidity in the banking sector. One thing is for sure, someone somewhere will profit and sadly it's not going to be me!