September 27, 2007

Bank of England loan auction

A new facility is being put in place by the Bank of England today, the emergency fund has been put in place by the Governor of the Bank of England, Mervyn King.

But the banks who only a few days ago were crying out for help are expected not to be taking up any of the facilities. And the main reason why, is cost! Banks can now borrow funds from other sources at a rate that is cheaper than the Bank of England is planning on charging. In fact, the cost will be around 0.4 per cent cheaper.

The bidding starts at 11.00 today and the banks and building societies have only thirty minutes to place their bids.

Source [Times Online]