VedantaTrader Posted April 17, 2008 Share Posted April 17, 2008 auction 3 times oversubscribed Interesting... BOE Says Banks Bid for 50 Billion Pounds, Most in Three Months By Jennifer Ryan April 17 (Bloomberg) -- The Bank of England said financial institutions bid for 50 billion pounds ($99 billion) in its weekly auction, the most in three months, as a worsening shortage of credit increased the need for central bank funds. The Bank of England offered 13.7 billion pounds in today's weekly auction, it said in a statement in London today. That made the operation more than three times oversubscribed. Bids were the most since Jan. 10. Higher credit costs threaten to exacerbate the U.K.'s housing downturn and push the economy into a recession as mortgage lenders including HBOS Plc and Barclays Plc's Woolwich unit withdraw their best deals and raise interest rates. The Bank of England and the government are likely to announce a plan to shore up the credit market in the next two weeks. ``It shows the scale of the problem,'' said Nick Parsons, head of market strategy at NABCapital in London. ``There is not enough money being shifted around the system. You can understand why there is political pressure being bought about to solve problems in the markets.'' The gap between borrowing pounds for three months and the Bank of England's benchmark rate, currently at 5 percent, rose to 93 basis points on April 14 and stayed close to that level yesterday. That's the most since December. Prime Minister Gordon Brown said yesterday he's looking for ways to inject funds into the mortgage market and is studying measures already taken in the U.S. British house prices dropped the most since 1992 in March, HBOS, the country's largest mortgage lender, said last week. The government and the Bank of England have so far refused to say when they will announce their measures to help the mortgage market. ``These operations may be attracting more attention from primary institutions because the liquidity measures haven't been finalized,'' said Peter Dixon, global equities economist at Commerzbank AG. ``Their attitude may be that they don't know what's coming so they'll take what they can when they need it.'' Quote Link to comment Share on other sites More sharing options...
sambino Posted April 17, 2008 Share Posted April 17, 2008 Can someone send a hat round HPC to get a few quid to help the poor banks out ? Quote Link to comment Share on other sites More sharing options...
Sofa Spud Posted April 17, 2008 Share Posted April 17, 2008 That'll push the FTSE up 75 points in this topsy-turvy situation we seem to be in! Quote Link to comment Share on other sites More sharing options...
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