Bank of England credit relief auction
Published December 18th, 2007
The Bank of England will attempt to relieve the strain on credit markets this morning with the first of its two auctions to inject £11.35 billion of liquidity into the financial system.
The move is part of a co-ordinated action between five central banks, including Britain, the US and the eurozone to address the credit squeeze.
The auction today by the Bank of England will offer £10 billion over a three-month period with the borrowing rate determined by the rate at which banks are bidding to borrow money.
Yesterday, the European Central Bank (ECB) said that it would offer unlimited funds below market rates to ease the liquidity crisis, suggesting that the central banks’ co-ordinated intervention was not enough to ease pressures in the money markets.
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