BoE to reform money markets

A consultation paper published today reveals three changes to the way lenders can borrow from the central bank. Firstly, the Bank of England is considering the introduction of a ‘discount window facility’ to allow banks to borrow cash and gilts with a wide range of collateral. The consultation paper says such a move should help provide liquidity insurance for banks in the event of future market problems. Permanent long-term repo markets will also be introduced, and will accept broader classes of collateral than were previously accepted by the Bank. Lastly, existing Standing Faciliti...