BOE Launches Repo for Pension Funds to Tame Risk of Gilt Crises
- Tool aims to ease liquidity strains among non-banking firms
- Facility is a response to the gilt market blow-up in late 2022
The Bank of England in the City of London.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
The Bank of England has launched a new repo facility to provide emergency cash to financial firms beyond the banking sector, as it looks to avoid a repeat of the 2022 UK bond market blow-up.
The central bank on Tuesday opened applications for the Contingent NBFI Repo Facility, which will lend directly to insurers, pension funds and so-called liability-driven investment strategies. The firms will provide gilts as collateral for the loans and their total holdings must be worth £2 billion ($2.5 billion) or more to be eligible, according to a statement.