MNI BRIEF: BOE Non-Bank Repo Facility To Start 2025 - Ramsden
MNI (LONDON) - The Bank of England is finalising work on its emergency non-bank repo facility, with it on track to be open for business at the start of next year, Bank of England Deputy Governor Dave Ramsden said at an OMFIF event in London Monday.
Ramsden highlighted how core gilt market acitivity is continuing to shift to non-bank financial institutions (NBFIs), particularly hedge funds which at one point this year accounted for over 30% of gilt trading volumes. Banks take up of gilts has not grown as fast as the rise in UK debt issuance leaving non-banks to take up the slack, and the BOE has prioritised the development of a facility to provide liquidity to non banks in times of stress -- the Contingent NBFI Repo Facility (CNRF).
Ramsden noted that while market participants wanted to know the precise circumstances when the new facility would be activated the Bank was not going to provide these -- instead using a range of measures and judgement to assess when NBFI liquidity was needed.