LONDON (MNI) – The Bank of England announced Monday it is
withdrawing some of the lesser, or unused, schemes in its Asset Purchase
Facility, saying they are no longer necessary, but it is pressing ahead
with plans to buy secured commercial paper.
The central bank gave 12 months’ notice of its intention to
withdraw the Commercial Paper Facility, a “backstop” facility for the CP
market. It also withdrawing its unused Secondary Bond Market Credit
Guarantee Scheme.
The BOE’s APF, which handled quantitative easing through the bulk
purchase of gilts, also provided a raft of smaller schemes designed to
boost liquidity in other markets, such as commercial paper.
The BOE said it was ending its CP scheme because it was no longer
necessary as the BOE’s “purchases of Commercial Paper have reduced
in recent months and there is currently no outstanding stock held.”
The BOE said the Credit Guarantee Scheme for the Bond Secondary
Market Scheme had made no purchase since it was set up.
The BOE will continue with its buying and selling of corporate
bonds as this serves “a useful role as a backstop, particularly during
periods of increased market uncertainty.”
It said it expected to start purchases shortly in its previously
unused Secured Commercial Paper Facility.
–London Bureau; Tel: +44207862 7491; email: ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
