The Bank of England has revealed the use of its Special Liquidity Scheme (SLS) was considerable, with a total of £185bn of Treasury Bills issued in exchange for high quality mortgage-backed and other securities.
The scheme was designed to finance part of the overhang of illiquid assets on banks' balance sheets by exchanging them temporarily for more easily tradable assets. Securities formed from loans existing before 31 December 2007 have been eligible for use in the SLS, which closed on 30 January. Although the drawdown window to access the SLS has now closed, the scheme will remain in place for three years, thereby providing participating institutions with continuing liquidity support and certainty. IFAonline
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