BOE sends a letter of information request to banks
The communication by the BOE on this whole issue has been very messy but there is no doubt that they are edging closer to the implementation phase. All they need is a trigger event and everything will start falling into place. On the letter, the BOE comments:
We recognise that a negative policy rate could have wider implications for your firm's business and your customers. The Bank and PRA will consider the wider business implications, including on financial stability, safety and soundness of authorised firms and pass-through to the wider economy. This letter, however, is seeking information to understand firms' operational readiness and challenges with potential implementation, particularly in terms of technology capabilities.As part of this work, we are requesting specific information about your firm's current readiness to deal with a zero Bank Rate, a negative Bank Rate, or a tiered system of reserves remuneration - and the steps that you would need to take to prepare for the implementation of these.
The full request can be found here.
Cable still seen more steady on the day around 1.3040-50 currently.
