Liquidity transformation, collateral assets and counterparties

Calebe de Roure and Nick McLaren

Central Bank Review, 2021, vol. 21, issue 4, 119-129

Abstract: We investigate if the Bank of England's liquidity facilities encourage some counterparties to participate more than others and if the use of some collateral assets is promoted more than others. Between 2010 and 2016, there was regular usage of two facilities: Indexed Long-Term Repos (ILTR) and the Funding for Lending Scheme (FLS). We show that participation in ILTR is consistent with safe counterparties using the facilities to meet their liquidity needs. Collateral assets used for FLS are less liquid. Riskier and larger institutions are more likely to pre-position collateral in the FLS, but these counterparties do not subsequently draw upon FLS more than others do.

Keywords: Money demand; Collateral assets; Counterparties (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.sciencedirect.com/science/article/pii/S1303070121000305 (application/pdf)

Related works:
Working Paper: Liquidity transformation, collateral assets and counterparties (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcb:cebare:v:21:y:2021:i:4:p:119-129

Access Statistics for this article

More articles in Central Bank Review from Research and Monetary Policy Department, Central Bank of the Republic of Turkey Contact information at EDIRC.
Bibliographic data for series maintained by () and () and () and ().