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£340m Of Quantative Easing In One Week


whojamaflip
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http://www.telegraph.co.uk/finance/finance...cial-paper.html

"In its first report on progress since the scheme opened, the Bank said on Friday that it bought £340m of three-month commercial paper in the week ending Thursday February 19. To put the figure in context the total amount of three-month commercial paper in issue is about £6bn. "

the BOE sell "high grade" government paper, and buy "lower grade" corporate paper. The BOE obviously make a profit on the yield differential.

The Quantatvive easing element starts when the commercial paper gets rolled, BOE will simply refinance the roll by printing money, and the mugs ..sorry investors who picked up the "high grade" government paper will be left holding the baby.

assuming its all 90day paper then at the current rate thats just £5billion of easing, I would imagine it will need to be at least ten times that amount to make any impact. It will be interesting to watch the rates of govenment paper if this scheme picks up (ten or twentfold), as will what the FX market think of those freshly printed notes in 90days time (sorry 83 days time!!).

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