BoE to turn on liquidity taps next week

BoE to offer at least 5 bln stg per month for foreseeable future.

15-Jun (Reuters) — The Bank of England will start offering cheap cash loans to banks next week as part of a package of measures to ease the flow of credit to the economy, and which analysts said should help alleviate a euro crisis-led funding squeeze.

Banks will be able to swap assets no one else wants to buy, such as packages of loans, credit card debt, and commercial real estate loans, in return for a 6-month cash loan under the central bank’s first Extended Collateral Term Repo Facility operation on June 20.

The decision to activate the facility comes as UK banks have faced significantly higher funding costs than their euro zone counterparts, and analysts said the scheme should help take off some of the pressure.

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