Minutes of Money Market Committee meeting – April 2024

Minutes

Item 1 – Welcome

The Chair thanked members for attending and confirmed that the Minutes of the December 2023 meeting had been published on the Bank’s website.^{footnote [1]}

The Chair welcomed new members and those who were attending as part of the Bank’s Meeting Varied People (MVP) initiative.

Item 2 – Discussion on Market Conditions

A member of the committee presented an overview of market conditions. This covered: economic and inflation conditions (UK and globally); the UK Budget and gilt issuance; central bank policy developments; and regulatory change across the UK, Euro area, and the US. In addition, future potential volatility events were outlined, including elections and geopolitical tensions.

Committee members agreed money markets are functioning well and adjusting to the combination of increased collateral supply and falling central bank reserves in an orderly manner. The committee noted that dynamics in unsecured and secured market rates were rational, but also acknowledged the potential impact as the level of bank reserves shifts closer to the preferred minimum range of reserves. The committee added that the Bank’s short-term repo facility was working well, and volumes reflected their expectations.

The committee discussed the recent and upcoming reforms on US institutional prime money market funds. Noting the recent increased portfolio minimum liquidity requirements and discretionary liquidity fees, as well as the upcoming mandatory liquidity fees that will be applied later this year.

A member of the committee also provided an update from the ECB’s recent Money Market Contact Group.footnote [2]

Item 3 – Working Group Updates

A representative of the UK Money Markets Code sub-committee provided an update on its ongoing review of the Money Markets Code, which is now in the final stages.

Draft changes to the Code will be circulated to committee members, relevant trade associations and other stakeholders for comment. The final document will be ratified by the committee prior to publication, which is expected to be in the first half of 2024.

A member of the Securities Lending Committee Secretariat provided an update on the working group looking into fails in the UK securities lending market. It was noted that the group has fed into the revision of the UK Money Market Code.

Item 4 – Any other business

A representative from the FCA provided and update from the T+1 Accelerated Settlement Taskforce Report.^{footnote [3]} The report recommends the UK migrating to T+1 by the end of 2027, and in the interim, various operational changes to facilitate settlement being implemented by the end of 2025.   

The Chair thanked members for their time and welcomed any suggestions for future agenda items to be sent to the Secretariat in due course.

Committee attendees

Gordon Lowson – Abrdn

James Winterton – Association of Corporate Treasurers

Ina Budh-Raja – Bank of New York Mellon

Romain Dumas – UBS

Inna Shaykevich – Goldman Sachs

Chris Brown – Insight Investment

Olivia Maguire – J.P. Morgan Asset Management

Tony Baldwin – LCH

John Wherton – LGIM

Scott Creed – Lloyds Bank

Emma Cannon – Lloyds Bank (presenter)

Joanne Gaskin – Lloyds Bank (presenter)

Oliver Butcher – NatWest Markets

Avi Tillu – PIMCO

Chirag Patel – Rabobank

Alan Williams – Santander UK

Jessica Pulay – DMO (Observer)

Jo Whelan – DMO (Observer)

Alan Barnes – FCA (Observer)

Ellie McCormack – FCA (Observer)

Bank of England

Andrea Rosen

Simon Dolan

Grace Greer

Tom Archer

Apologies

Victoria Worsfold – Guildford Borough Council

Nic Erevik – Newcastle Building Society

John Argent – Tradition

Emma Cooper – BlackRock

Marije Verhelst – Euroclear

James Murphy – HSBC

Nina Moylett – M&G

Romain Sinclair – Société Générale