Index-linked Treasury Stock
Index-linked treasury stocks are gilts issued by the UK Government. They pay out twice a year, with the amount indexed to the Retail Prices Index.
Central banks
Recalibration of the Indexed Long-Term Repo Operation – Market Notice 11 June 2025
This Market Notice confirms the recalibrated parameters of the Indexed Long-Term Repo (ILTR) operation. In line with the Bank’s transition to a repo-led, demand driven operational framework for providing reserves, which ILTR operations are central to, the Bank is announcing an increase in the total amount of reserves available in each ILTR auction, an increase in the quantity of reserves available at fixed minimum spreads, and a gentler upward sloping supply curve than previously to ensure that clearing spreads only rise gradually.
Private safe asset supply and financial instability
This article studies the supply of private safe assets by banks and its implications for financial stability. Banks originate loans and improve loan quality through hidden screening efforts. They can then create safe assets by issuing debt backed by the safe payoffs, from both loans they have originated and a diversified pool of loans from other banks. The interaction between banks’ screening efforts and diversification decisions determines the volume of safe assets they supply.
Statistical Notice 2025/03 - Bank of England Levy: request for contact details
Statistical Notices update the definitions and guidance contained in the Banking Statistics Yellow Folder
Delays to changes to country groupings for International Banking Statistics
This article provides an update regarding the timeline of implementing changes for country grouping conventions used in statistics covering the international business of monetary financial institutions operating in the UK and the consolidated claims of UK headquartered monetary financial institutions.
The poor, the rich, and the credit channel of monetary policy
Monetary policy can have contrasting effects on economic inequality via distinct channels. We examine the effect working via the credit channel, whereby monetary policy induces heterogeneous access to credit for business owners based on their wealth. Using unique data on business loan applications from small firms, we find that monetary expansions increase the bank’s likelihood to approve loan applications, particularly so for low-wealth entrepreneurs, translating to higher future income and wealth.
The impact of monetary policy and macroprudential policy on corporate lending rates in the Euro area
We examine the differential impact of monetary policy and macroprudential policy on bank lending rates in the euro area, using granular corporate loan-level data for the period 2019-2023. We find three results: First, consistent with the predictions of a stylized theoretical model of bank lending rates, monetary policy exerts an order of magnitude larger impact on lending rates than macroprudential policy. Second, the effectiveness of monetary policy transmission weakens when interest rates are close to or below zero.
Updates to the PRA’s approach of responsible openness to international banks
The PRA has today clarified its expectations around business conducted within branches of international banks operating in the UK, as well as its booking model expectations and liquidity reporting for such branches.
Liquidity dependencies in the euro area
This study investigates to what extent the significant liquidity injections by the ECB over the past 15 years may have created a dependency by banks on central bank liquidity itself. Following Acharya et al. (2024), I examine whether the ECB's liquidity provision changed banks' incentives to increase liquid deposits, potentially heightening their susceptibility to liquidity shocks.
From purchases to exit: central bank interventions in corporate debt markets
Central banks increasingly act as market-makers-of-last-resort, yet the impact and exit of such interventions remain poorly understood. Using euro-area data, we analyze the cycle of market freeze, intervention, and exit in short-term debt markets. A run on money market funds (MMFs) triggered a collapse in these markets in March 2020. Firms replaced only 27% of lost funding through credit lines. The European Central Bank intervened, fully replacing MMFs for some firms and allowing them to issue more debt at lower rates and longer maturities.
Pages
