Jump to content
House Price Crash Forum
Sign in to follow this  
GloomMonger

Banks Tap Emergency Boe Funds For First Time In 2 Years

Recommended Posts

http://uk.news.yahoo.com/banks-tap-emergency-boe-funds-first-time-2-103322928.html

Banks borrowed a daily average of 3 million pounds in emergency funds from the Bank of England in the month ending July 9, the first time in more than two years that institutions have used the facility, central bank data showed on Wednesday.

The Bank's standing lending facility was last used in the period ending April 8, 2009, when banks borrowed a daily average of 43 million pounds.

Banks must pay a premium to use the facility, with a rate of 0.75 percent to borrow funds, 25 basis points above official interest rates.

The Bank does not provide a breakdown of the number of banks that used the facility, or how much was borrowed at any one time.

The standing deposit facility -- which enables banks to park their cash at the central bank -- has not been used at all since the period ending March 4, 2009.

The Bank's standing facilities have two aims: firstly, to keep overnight market rates in line with the official Bank rate of 0.5 percent.

Secondly, the facility is also intended to help banks manage unexpected "frictional" payment shocks resulting from technical problems in banks' own systems or in the market-wide payments and settlements infrastructure, which prevent them from settling their books at the end of the day.

Not long now :unsure:

Share this post


Link to post
Share on other sites

and at the same time a top 10 lender and recipient of BoE funding, the YBS, has bought Egg's savings account book in order to expand it's mortgage business by lending more

this comes from the organisation who's chairman said of the credit crunch 'nobody could have seen this coming' and which is locationally literally half way between B&B's now empty former head office, and HBOS Yorkshire head office campus (10 miles or so)

Edited by Si1

Share this post


Link to post
Share on other sites

and at the same time a top 10 lender and recipient of BoE funding, the YBS, has bought Egg's savings account book in order to expand it's mortgage business by lending more

this comes from the organisation who's chairman said of the credit crunch 'nobody could have seen this coming' and which is locationally literally half way between B&B's now empty former head office, and HBOS Yorkshire head office campus (10 miles or so)

is that Yorkshire Building Society? The ones currently offering a 3.49% 5-year fix..

Wondered how that was remotely affordable.

Share this post


Link to post
Share on other sites

is that Yorkshire Building Society? The ones currently offering a 3.49% 5-year fix..

Wondered how that was remotely affordable.

they would seem to have positive cash flow but I doubt they are particularly solvent looking forward - and they have hoovered up several other smaller building socs, I knew some managers there and they were always universally bullish on house prices, only thing saved them so far have been money-market restrictions for building socs AFAIK and yet they continue to aggresively chase the mortgage market

Share this post


Link to post
Share on other sites

Surely this must be some mistake? Were we not all told just a week or so back that ALL the UKs banks passed their 'tests' with flying colours?! and that they are well capitalised?! etc etc.

Share this post


Link to post
Share on other sites

"Banks must pay a premium to use the facility, with a rate of 0.75 percent to borrow funds, 25 basis points above official interest rates."

Diddums :/

Share this post


Link to post
Share on other sites

quite.

not necceselery.

The article is carefully worded.

Does it mean A BANK borrowed on average £3m, overnight, or that ALL BANKS on average borrowed £3m overnight, or that the average borrowing by banks was £3m overnight.

Share this post


Link to post
Share on other sites

"Banks must pay a premium to use the facility, with a rate of 0.75 percent to borrow funds, 25 basis points above official interest rates."

Diddums :/

Yeah - must be crippling to have to pay 0.75% interest, they're really penalising the banks inability to balance their books.

I wonder what the market is charging?

Share this post


Link to post
Share on other sites

Has this anything to do with the Post Office accounts being unavaiable today? They are run by an Irish bank with a British banking licence.

Some Post Office accounts are currently run by the Bank of Ireland. Not the ISA's or Child Trust Fund accounts, though - they're Family Investments.

Also, the old Post Office Travel Money cards, which were issued by the BoI, were withdrawn earlier this year. The new Travel Money Plus card is issued by the Clydesdale Bank. I wonder if this is an indication of which way the wind is blowing.

Share this post


Link to post
Share on other sites

not necceselery.

The article is carefully worded.

Does it mean A BANK borrowed on average £3m, overnight, or that ALL BANKS on average borrowed £3m overnight, or that the average borrowing by banks was £3m overnight.

It has got to be billion, not million. Yahoo must have got it wrong, unless the borrower is some teensy weensy little bank or building society, for whom £3m matters, but not to anyone else.

For the big players, £3m is such a ridiculously small amount of money - it would be like us going to the bank for a loan of 3p.

Share this post


Link to post
Share on other sites

It has got to be billion, not million. Yahoo must have got it wrong, unless the borrower is some teensy weensy little bank or building society, for whom £3m matters, but not to anyone else.

For the big players, £3m is such a ridiculously small amount of money - it would be like us going to the bank for a loan of 3p.

Southsea? They went bust on 16th June I think, and this data is for month prior to 9th July.

Share this post


Link to post
Share on other sites

It has got to be billion, not million. Yahoo must have got it wrong, unless the borrower is some teensy weensy little bank or building society, for whom £3m matters, but not to anyone else.

For the big players, £3m is such a ridiculously small amount of money - it would be like us going to the bank for a loan of 3p.

which is why the wording is so careful.

An average of all the banks taking the funds could well be £3m, while most take 0, one could have taken a couple of bn.

Of course, you are insolvent if you are 3p out....they would have to put that right with a temporary loan..otherwise we would have the situation of answering the question of just how much insolvency is insolvent.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 343 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.