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lypsey

1% Over Base Rate- From Bloomberg

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http://www.bloomberg.com/apps/news?pid=206...&refer=home

It says "Sept. 19 (Bloomberg) -- The Bank of England said it will lend 10 billion pounds ($20 billion) to commercial banks in an emergency three-month auction and widen the range of securities it accepts as collateral.

``This measure is being taken to alleviate the strains in longer-maturity money markets,'' the bank said in a statement today. The Bank of England, which will accept ``mortgage collateral'' in the auction, said the minimum rate it will lend at is 6.75 percent.

The decision is an about-face by Bank of England Governor Mervyn King, who last week said that widening the collateral accepted by the central bank or offering money for ``longer periods'' would risk ``moral hazard.'' The government and the bank on Sept. 14 had to rescue Northern Rock Plc after the lender struggled to raise money in credit markets.

``One can only say that it does represent something of a U- turn,'' said Matthew Sharratt, an economist at Bank of America Corp in London. ``It's likely that the pressure on Northern Rock would have been considerably less had this policy been undertaken a couple of weeks ago.''

The first auction will take place next week and three further offerings will be made at ``weekly intervals,'' the bank said. The size of future auctions will be decided in ``due course."

Mervyn King is ducking and diving more than George Micheal , has he any idea what he is doing

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So is that NR completely sorted? Looks like they can continue to fund their loans and take on new business.

It will be even more profitable after the BoE cut by 0.5% next month.

Anyone who wants the money step forward now. STAND STILL APPLEPIE!!!

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The BoE are now guaranteeing customers deposits and providing liquidity for Banks.

In other words YOU are paying to protect bank deposits and YOU are funding banks day to day operations. YOU will see this in rising prices due to crashing pound.

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