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Banks Pay Back 80% Of Special Liquidity Scheme

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Taken from the homepage of this site.

UK banks and building societies have repaid 80% of Special Liquidity Scheme (SLS) loans according to the latest Bank of England quarterly report.

According to the figures, banks have repaid £148bn to SLS by end of May, out of £185bn of UK Treasury Bills that have been lent since drawdown closed at the end of January 2009. In Q1 2011, £94bn had been paid back.

The scheme was set up in April 2008 to improve the liquidity position of the banking system by allowing banks and building societies to swap their high-quality mortgage-backed and other securities for UK Treasury Bills for up to three years.

In order to prevent a refinancing ‘cliff’, the Bank has held bilateral discussions with all users of the Scheme to ensure that there are plans in place to reduce their use of the Scheme in a smooth fashion.

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As the banks have to repay all of the SLS funds to the BoE by the end of 2011 (with intermediate repayments target along the way) this should hardly be news, but they are ahead of meeting the intermediate targets which I suspect manes they have chosen to turn a blind eye to balance sheet repair aka the impaired assets they need to get rid of at some point (extend and pretend etc).

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So how can it be that shares in LLOY and RBS are both still under 50p ?

Something doesn't add up.

It doesn't add up to me either. As far as I know there are two types of money broad money and narrow money. Every time the banks make a loan the amount of broad money increases. So how does the narrow money increase or tier 1 capital (Apart from QE)?

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  • 309 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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