Liquidity insurance

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Bank of England.

The Bank of England's (the 'Bank's') liquidity insurance facilities are part of its Sterling Monetary Framework (SMF).

The liquidity insurance facilities include the Bank's:

  • Indexed Long Term Repo (ILTR) operations.
  • Discount Window Facility (DWF).
  • Contingent Term Repo Facility (CTRF).

Their purpose is to provide a 'liquidity upgrade' or 'collateral transformation' facility for banks and other SMF participants, thereby improving the liquidity of the bank (or other participating institution).

The ILTR is designed for the most predictable and regular needs.

The DWF is tailored for the particular short and medium term needs of individual institutions.

The CTRF is for use in conditions of exceptional and market-wide stress.

See also