Reported 5 months ago
Bank of England Governor Andrew Bailey announced a significant shift in liquidity arrangements, urging markets to prepare for a substantial increase in securities repurchase operations as the central bank plans to replace asset purchases under quantitative easing with short-term loans known as "repos." This move aims to unwind the QE portfolio and reduce losses that have burdened the government, with the BOE lending central bank reserves temporarily in exchange for collateral like gilts to mitigate interest rate risks. Bailey warned of potential market disruptions during the transition but expressed confidence in the new operational model's appeal and benefits.
Source: YAHOO