UK Treasury to Use Bank of England as Temporary Source of Financing
April 09 2020 - 2:54AM
Dow Jones News
By Jason Douglas
The U.K. Treasury said Thursday that it plans to use the Bank of
England as a temporary source of financing during any market
disruptions due to the new coronavirus.
The Treasury's so-called ways and means facility at the central
bank acts like an overdraft, and was last used to significant
extent during the financial crisis more than a decade ago.
The British government's planned use of the facility may fuel a
belief among some economists and investors that the scale of the
economic crisis triggered by the novel coronavirus may require
governments to abandon a long-held taboo on tapping their central
banks for cash.
The U.K. Treasury said its main source of financing will
continue to be borrowing in financial markets and the BOE facility
will only be used to provide cash in moments of market stress. Any
drawings will be repaid by the end of the year.
Write to Jason Douglas at jason.douglas@wsj.com
(END) Dow Jones Newswires
April 09, 2020 02:39 ET (06:39 GMT)
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