Bank of England Debuts Mortgage Plan
21 April 2008
The Bank of England (BoE) initiated a plan for providing liquidity to the British credit market today, offering an initial 50 billion pounds of government treasuries. The plan, very similar to recent action undertaken by the US Fed, provides government debt in return for less liquid assets. This action is intended to reduce lending strain on lenders and ease the effect of the current credit crunch. The plan will swap government treasuries for private debt for a 1 year period, and can be rolled over at the BoE’s discretion for up to 3 years.