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

£90 Billion Of Qe By The Back Door

Recommended Posts

Today Mark Carney, the recently appointed governor of the Bank of England gave his first public speech. On page 5 he promises "higher asset prices"

Page 9 is the real doozey though......."Accordingly, I can confirm today that, for major banks and building societies meeting the minimum 7% capital threshold, the Bank of England will reduce the level of required liquid asset holdings. The effect will be to lower total required holdings by £90 billion, once all eight major banks and building societies meet the capital threshold."

So no new QE, but a £90 billion reduction in the need to provide QE.

..._

Edited by DiggerUK

Share this post


Link to post
Share on other sites

Mr Carney seems to be playing chicken with the market.

Promises low rates for years, no matter what. Now saying to the world, we're happy to allow our banks to have higher leverage ratios.

Daring the market to test him.

Edited by DogTired

Share this post


Link to post
Share on other sites

Mr Carney seems to be playing chicken with the market.

Promises low rates for years, no matter what. Now saying to the world, we're happy to allow our banks to have higher leverage ratios.

Daring the market to test him.

What I want to know is....who voted for this chump ?

Share this post


Link to post
Share on other sites

http://uk.reuters.com/article/2013/08/28/uk-britain-economy-carney-idUKBRE97Q15T20130828

The Bank of England may provide more stimulus for Britain's economy if financial markets get ahead of themselves and threaten to choke off its recovery, its governor said on Wednesday.

In his first policy speech since taking over the bank, Mark Carney also announced a relaxation of rules for banks which could boost lending and help Britain's "solid but not stellar" emergence from its deep recession.

Don't worry he's going to do more QE as well as via the back door.

Champers all round.

Share this post


Link to post
Share on other sites

HtB may need to be extended to give FTBs 25% deposits interest free for 5 years and the mortgage guarantee extended to 30% and some MIRAS ... and don't think that if this is what is needed to get the debt moving George will do it. Anything will be done to keep the ponzi going, anything including sub 1% mortgages, anything to keep HPI going.

The banks may even relax lending rules .... oh Carney just did that.

£90Bn, that's £3k for every adult in the land. Absurd to suppose that people will want to borrow that at present, it could clear all the credit card and personal loan debts in the country, with about £15Bn left over. A massive sum to offload onto debt-shy borrowers.

Share this post


Link to post
Share on other sites

£90Bn, that's £3k for every adult in the land. Absurd to suppose that people will want to borrow that at present, it could clear all the credit card and personal loan debts in the country, with about £15Bn left over. A massive sum to offload onto debt-shy borrowers.

That`s their biggest problem

Share this post


Link to post
Share on other sites

Today Mark Carney, the recently appointed governor of the Bank of England gave his first public speech. On page 5 he promises "higher asset prices"

Page 9 is the real doozey though......."Accordingly, I can confirm today that, for major banks and building societies meeting the minimum 7% capital threshold, the Bank of England will reduce the level of required liquid asset holdings. The effect will be to lower total required holdings by £90 billion, once all eight major banks and building societies meet the capital threshold."

So no new QE, but a £90 billion reduction in the need to provide QE.

..._

I have a slightly different take on the reason for this.

It will vastly reduce any shock when the first ~50% of QE is unwound but it will take almost a year for the banks etc to adjust (along with other changes) in the mean time so they need to have this in place well before QE is reduced.

I think we will see a 25-50% QE reduction before any BoE IR rises.

This should also reduce the cost to HMT or BoE of initial QE unwinding.

The final remaining bit of QE will be sloshing around for liquidity reasons till the end of the decade or may be slightly beyond though.

Some of the 8 majors will not be able to take advantage of this i.e. Nationwide for another 2 years or Barc 18 months?

(Co-Op not in the top 8)

Edited by koala_bear

Share this post


Link to post
Share on other sites
........It will vastly reduce any shock when the first ~50% of QE is unwound but it will take almost a year for the banks etc to adjust (along with other changes) in the mean time so they need to have this in place well before QE is reduced........The final remaining bit of QE will be sloshing around for liquidity reasons till the end of the decade or may be slightly beyond though.

It was when 'tapering' came to be the headline of the day, that I started to look at how they had 'tapered' before......they have never done it. All they do is 'control' inflation at 2% to eradicate government debt over 35/36 years. That is an impossible dream with the ammount of borrowings we see now with QE added into the mix, it cannot be done painlessly in my view.

How do you unwind from the position they are in?.......More QE is the quick fix, but I only see that game ending in tears.

..._

Share this post


Link to post
Share on other sites

Why are these people not held accountable for their statements? Are financial journalists given the opportunity to question the rhyme or reason? We are always guessing what these new policies mean and the thinking behind them. Surely we should be told exactly why these policies, such as HtB, are being introduced.

Share this post


Link to post
Share on other sites

The need for QE to continue is the theme of this Telegraph article by Ambrose Evans-Pritchard.

Not a favourite hack of mine, but his info is worth a sound bite or two.

That China is reported as flogging $20 Billion of US treasuries in July is interesting, as is the fact from the IMF that Brics/emerging economies have gone from 15% of global GDP in the 80's, to even stevens today, i.e.,50% of global GDP.

Need is one thing, lack of another option is the other.

..._

Edited by DiggerUK

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   209 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

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.