Operational Standing Facilities

From ACT Wiki
Jump to: navigation, search

Bank of England.

(OSF).

The Bank of England's Operational Standing Facilities (OSF) are part of its Sterling Monetary Framework (SMF).


The OSFs are the:

  • Operational Standing Lending Facility.
  • Operational Standing Deposit Facility.

The facilities are overnight and on demand, at predetermined fixed interest rates.


As part of the SMF, the OSFs' purposes are to:

  • Provide a mechanism to bring about a close alignment of money market rates and the Official Bank Rate.
  • Provide a means for banks and other SMF participants to manage any temporary liquidity shortages arising from technical problems in their internal payments and settlement systems, or in the market-wide payments and settlements infrastructure.


Such temporary liquidity shortages are sometimes known as 'frictional' payment shocks.


See also