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As set out in the November 2018 Financial Stability Report, the Bank stands ready to provide liquidity in all major currencies. Today’s announcement is a prudent and precautionary step, consistent with the Bank’s financial stability objective, to provide additional flexibility in the Bank’s provision of liquidity insurance in coming weeks, supporting the functioning of markets that serve households and businesses.
In these operations, eligible banks and building societies that are members of the Sterling Monetary Framework will be able to borrow in euros from the Bank of England. These operations will complement the existing weekly US dollar repo facility as well as the move to weekly sterling operations (Indexed Long-Term Repos – ILTRs) announced on Tuesday 26 February.
The transactions will be facilitated by the activation of the standing swap line between the Bank of England and the European Central Bank as part of the existing international network of standing swap lines which provide an important tool for central banks in pursuit of their financial stability objectives.
The first weekly operation will be on 13 March and operations will run until further notice. The Bank will continue to monitor market conditions carefully and keep its operations, including their frequency, under review.
An accompanying Market Notice provides additional detail and the terms of this operation.