Banks Tap BoE Cash as Riskier Collateral Rises
British banks are pledging more higher-risk collateral to the Bank of England's ILTR facility as quantitative tightening drains reserves, making funding reliance and collateral quality more uncertain.
What happened
British banks are pledging more higher-risk collateral to the Bank of England's ILTR facility as quantitative tightening drains reserves, making funding reliance and collateral quality more uncertain.
Why it matters
The key figure is £1.9 billion of Level C collateral pledged in the August 18 operation, the most since March 2020; Reuters calculations put Level C collateral outstanding in ILTR at about £17.8 billion.
What to watch
Watch weekly ILTR borrowing and the value of Level C collateral to see whether banks' reliance on BoE cash keeps rising.
Transcript
British banks are pledging more higher-risk collateral to the Bank of England's ILTR facility as quantitative tightening drains reserves, making funding reliance and collateral quality more uncertain. The key figure is £1.9 billion of Level C collateral pledged in the August 18 operation, the most since March 2020; Reuters calculations put Level C collateral outstanding in ILTR at about £17.8 billion. Watch weekly ILTR borrowing and the value of Level C collateral to see whether banks' reliance on BoE cash keeps rising. FreshInsight delivers source-grounded finance briefs for market professionals. Source: Reuters Not financial advice. For information and education only.
Primary sources
Reuters
Distribution
YouTube / IcinC3hDp6E
Topics
finance, freshinsight, banks, boe, cash, bank-of-england, bank-funding, barclays-plc, collateral-quality, credit, funding-circle-holdings-plc, iltr-use, level-c-collateral, level-c-collateral-value, quantitative-tightening, tap, uk-banks, weekly-iltr-borrowing
Disclaimer
Information and education only. Not financial advice.