The Bank of England has launched an emergency liquidity scheme to ensure commercial lenders do not run out of cash as it warned that immediate disruption from the pandemic could be more severe than its banking stress tests.
Underlining the risks to the financial system, the Bank has activated its contingent term repo facility (CTRF), an unlimited and cheap source of funding for commercial banks that desperately need cash.
Demand for sterling deposits has grown sharply as investors have sold assets to avoid further losses. The facility allows market operators to get hold of central bank cash reserves in exchange for high quality but less liquid collateral.
An article by TheTimes.co.uk