Wednesday, June 11, 2008
The Bank of England has struck a secret deal with top banks and building societies to rescue ailing competitors in return for part of the £50bn liquidity fund.
Jason Kabel, associate director and portfolio manager, money market and fixed income for F&C Investments, said the country’s biggest lenders were being granted access to the Bank’s special liquidity fund in return for the trickling down to smaller retail banks through transactions and not being horded bolster up balances. Mr Kabel said: “The larger lenders all charged in first, however, it is a jittery market and they were reluctant to pass on money in transactions as, at the moment, you just have no idea who is going to have problems next. It has not solved the trust issue.