The Bank of England will be lobbied by high street banks today to extend the special liquidity scheme, put in place three months ago to help free up money markets which have been frozen by the credit crunch, reports The Guardian.
The banks are thought to be keen to ensure that the scheme, which allows billions of pounds to be pumped into the financial system, is fine-tuned as it is not becoming any easier for banks to borrow money on the financial markets.
Many need access to funding either from the money markets or from the Bank of England's special scheme in order to offer mortgages to customers and loans to businesses.
The banks are thought to have drawn up a number of suggestions for discussion with the Bank at a routine meeting today.
The scheme was rushed into place in April shortly after the near-collapse of US bank Bear Stearns. The rescue of Bear Stearns, orchestrated by the US Federal Reserve, raised fresh fears about the solvency of the banking system and caused financing among the banks to dry up following last summer's credit crunch.
Among the items for discussion at the meeting between the treasurers of the major lenders and Bank officials, is an idea from at least one of the lenders to extend of the type of assets that banks can pledge as collateral in the existing scheme.
THE PARLOUS STATE OF THE equity markets on both sides of the Atlantic has sent investors piling into the controversial practice of shorting, which has driven fees to more than double in just nine months, reports The Independent.
The price of borrowing stock in London's blue-chip companies has risen twofold since last October, according to Data Explorers, which specialises in stock-lending information, and went up as much as four times in January.
The data group added that the cost of borrowing stocks from mid-tier companies on the FTSE 250 has trebled in the past 10 months, although it did not release the actual size of the fees. In the UK, banks and housebuilders have been particular targets of the short sellers this year.
HEDGE FUNDS SUFFERED THEIR worst start to the year for almost two decades in 2008, although there was some good news as Man Group, the giant UK alternative asset manager, posted solid results for the last quarter, reports The Independent.
As the markets have weakened, hedge fund performance has suffered more than in the wake of the dot.com bust, as managers have had to write down billions or face closure. Peloton Partners, set up by Ron Beller and Geoff Grant, and Sailfish Capital have closed, while the private equity giant Carlyle ended its hedge fund business, and Citigroup in effect shut Old Lane, the manager it bought less than a year before.
Hedge Fund Research, a US analysis group, said the industry index it compiles was the worst in the first six months of the year since it began tracking in 1990.IFAonline
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From 6 April 2019