Banks rush to swap higher-risk credit assets for Bank of England cash: Report
Banks used £1.9 billion of the BoE’s riskiest collateral at one auction as total Level C holdings rose to £17.8 billion, Reuters found.
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Banks rush to swap higher-risk credit assets for Bank of England cash
British banks are stepping up their game by putting forth more higher-risk assets as collateral at the Bank of England. This action marks a notable increase in the use of top-risk collateral, reaching levels not seen since March 2020. Unlike the European Central Bank, the central bank is willing to accept loan-backed securities, ensuring that it safeguards its interests through stringent risk management strategies.
EXCLUSIVE: Banks rush to swap higher-risk credit assets for Bank of England cash
British banks are increasingly pledging higher-risk assets such as loans linked to high-interest store cards and vehicle leases as collateral at the Bank of England, a Reuters review of BoE filings shows.
UK banks are using risky credit assets as collateral to obtain liquidity from the Bank of England, signaling potential long-term risks.
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