PRESS RELEASE

5 March 2019

  • Bank of England will offer to lend euro to UK banks on a weekly basis
  • Bank of England to obtain euro from the ECB in exchange for pound sterling
  • Eurosystem would stand ready to lend pound sterling to euro area banks, if a need arises

The European Central Bank (ECB) and the Bank of England have decided to activate a standing swap line through which the Bank of England will offer to lend euro to UK banks on a weekly basis. The ECB will receive pound sterling from the Bank of England in exchange for euro. The activation marks a prudent and precautionary step by the Bank of England to provide additional flexibility in its provision of liquidity insurance, supporting the functioning of markets that serve households and businesses.

The swap line between the ECB and the Bank of England is part of a network of standing arrangements with four other central banks, including the Bank of Canada, the Bank of Japan, the Federal Reserve, and the Swiss National Bank. These standing swap lines were agreed in October 2013 and replaced a set of temporary arrangements. Liquidity providing arrangements contribute to global financial stability.

As part of the same agreement, the Eurosystem would stand ready to lend pound sterling to euro area banks, if the need arises.

The ECB will continue to work closely with the Bank of England to monitor market conditions carefully and keep its operations under review.

For media queries, please contact Eva Taylor, tel.: +49 69 1344 7162.

Notes:

Media contacts

Let's block ads! (Why?)

Subscribe to The Financial Analyst to get original opinion and all the latest news on trending financial topics and breaking stories related to analysis and global markets. If you have a tip or a financial opinion to share get in touch to submit your story.

LEAVE A REPLY

Please enter your comment!
Please enter your name here