London Approach and Outright Monetary Transactions: Difference between pages

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A non-statutory, informal framework introduced with the support of the Bank of England in  1970 for dealing with financially distressed companies.
(OMT).


The London Approach covers temporary support operations mounted by banks and other lenders for a company or group in financial difficulties, pending its possible restructuring.
Part of the [[open market operations]] of a central bank in which the central bank buys or sells securities outright - i.e. without the re-sale or re-purchase legs of [[reverse repurchase agreement]]s or [[repurchase agreement]]s.


This was a new tool for the European Central Bank in 2012 - and controversial, especially in Germany - though its use by other banks has not been so dogged by controversy.


Applicable only to firms which are financially distressed but which could have a viable future.
[[Category:Risk_frameworks]]
 
 
== See also ==
* [[Insolvency]]
 
 
== References ==
1. http://www.bba.org.uk/policy/article/london-approach/fx-and-money-markets-policy/
 
2. [[File:http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb940208.pdf]]

Revision as of 19:06, 28 August 2014

(OMT).

Part of the open market operations of a central bank in which the central bank buys or sells securities outright - i.e. without the re-sale or re-purchase legs of reverse repurchase agreements or repurchase agreements.

This was a new tool for the European Central Bank in 2012 - and controversial, especially in Germany - though its use by other banks has not been so dogged by controversy.

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