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(MNI) LONDON
(MNI) London

Bank of England official tells MNI event some NBFIs to be eligble for new collateral tool.

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The Bank of England is setting up a new tool to provide liquidity for certain non-bank financial institutions (NBFIs) at times of stress to help avoid market turbulence like that seen in September and October 2022, a leading Bank of England official said Thursday, during an MNI Connect event which can be seen in full here.

Andrew Hauser, the BOE's executive director for markets, told the event in London that policymakers would, "with immediate effect" begin to put together a facility allowing the central bank to lend to insurance companies and pension funds "including newly-resilient LDI funds", based on gilts and other high quality collateral. The Bank also wants to look at how to expand the facility to other non-bank participants in core sterling markets.

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The Bank of England is setting up a new tool to provide liquidity for certain non-bank financial institutions (NBFIs) at times of stress to help avoid market turbulence like that seen in September and October 2022, a leading Bank of England official said Thursday, during an MNI Connect event which can be seen in full here.

Andrew Hauser, the BOE's executive director for markets, told the event in London that policymakers would, "with immediate effect" begin to put together a facility allowing the central bank to lend to insurance companies and pension funds "including newly-resilient LDI funds", based on gilts and other high quality collateral. The Bank also wants to look at how to expand the facility to other non-bank participants in core sterling markets.