Banks in the UK have taken on the full amount of funding allotted under the Bank of England's (BoE) new tranche of funding for the country's ailing financial system.
The central institution announced yesterday (20 June) that it has decided to extend its collateral term repo operation (ECTR) until the end of the year in order to provide greater levels of support for struggling lenders.
This programme enables banks to use BoE funds to acquire lower-quality collateral in products such as personal loans, credit card debt and mortgage-backed securities than is usually possible.
As part of its commitment to stimulating the UK's economy, the BoE revealed it will commit some £5 billion ($7.8 billion) every month to the initiative.
And it has now emerged that banks took on the maximum amount of funds available under the new ECTR in the first round of bidding yesterday, at a minimum of 25 basis points above the base rate of interest.
By Claire Archer