The Bank of England is to inject £16.8 billion into frozen money markets as it attempts to boost the country’s financial situation. The funding is available for one week and adds to the £22.5 billion the bank has provided since last Friday. The move follows several weeks of severe financial turbulence, with the likes of Lehman Brothers collapsing, and Bradford and Bingley being part nationalised, as well as numerous state bail-outs and rescue takeovers for banks in Europe and America . Meanwhile, the UK government has come under increased pressure to guarantee the deposits of all its indigenous banks after the Irish Government announced they would provide such a guarantee on Tuesday.
The Libor – the rate at which banks lend to each other – has soared in recent months, and the rate t which banks lend dollars to each other nearly trebled to 6.88 per cent on Tuesday in the wake of Monday’s night rejection of the £392 billion bank rescue plan in America. Regardless of the sums pumped into the markets by the central banks of numerous countries, the global financial markets are likely to hinge on Wednesday night’s vote on revised plans for the controversial US bail out, which would see US taxpayers’ money used to buy up toxic bad debts from banks balance’ sheets.
Bank of England to Inject Further Funding
Bank of England to Inject Further Funding
Wed, 01 Oct 2008
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