The Bank of England has unveiled details of its plans to restart the money markets and prevent further damage to the UK banking system.
Last week, the Bank confirmed it would make around £50bn available to help deal with the effect of the credit crunch and keep the mortgage market afloat. The Special Liquidity Scheme will allow banks to temporarily swap their high-quality mortgage-backed securities for UK Treasury Bills. Announcing the scheme, Mervyn King, governor of the Bank of England, says: The Bank of England’s Special Liquidity Scheme is designed to improve the liquidity position of the banking system and raise confidence in financial markets while ensuring that the risk of losses on the loans they have made remains...
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