The Bank of England yesterday announced a £50 billion (US$100 billion) plan to allow banks to swap mortgage-backed securities for Treasury bills.
The bank’s aim is to unblock the interbank lending market and restore normal lending practices hampered by the subprime credit crisis. The asset swaps for one year, but renewable for up to three years, but only for assets which existed at the end of last year, the central bank said. The risk of losses on the swapped assets remains with the commercial banks, not the taxpayers, the Bank of England said.
“The Bank of England’s special liquidity scheme is designed to improve the liquidity position of the banking system and raise confidence in financial markets while ensuring that the risk of losses on the loans they have made remains with the banks,” bank Governor Mervyn King said.
The Bank of England swap offer began yesterday and will continue for six months.
Banks will be able to swap a range of high-quality assets, including AAA-rated securities backed by UK and European residential mortgages for Treasury bills.
Even though the assets have significant value, banks can’t use them to raise money because all such securities are tainted by the crisis over lower-quality securities backed by mortgages given to people with weak credit.
The swap gives the banks assets they can use to operate, in the hopes they will then resume lending more — and support the housing market and the overall British economy.
“Given its scale, the scheme is indemnified by the Treasury, but is designed to avoid the public sector taking on the risk of potential losses,” the bank said.
PRECISION STRIKES: The most significant reason to deploy HIMARS to outlying islands is to establish a ‘dead zone’ that the PLA would not dare enter, a source said A High Mobility Artillery Rocket System (HIMARS) would be deployed to Penghu County and Dongyin Island (東引) in Lienchiang County (Matsu) to force the Chinese military to retreat at least 100km from the coastline, a military source said yesterday. Taiwan has been procuring HIMARS and Army Tactical Missile Systems (ATACMS) from the US in batches. Once all batches have been delivered, Taiwan would possess 111 HIMARS units and 504 ATACMS, which have a range of 300km. Considering that “offense is the best defense,” the military plans to forward-deploy the systems to outlying islands such as Penghu and Dongyin so that
WHAT WAS ALL THAT FOR? Jaw Shaw-kong said that Cheng Li-wen had pushed for more drastic cuts and attacked him, just for the outcome to be nearly identical to his bill The legislature yesterday passed a supplementary budget bill to fund the purchase of separate packages of US military equipment, with the combined amount of spending capped at NT$780 billion (US$24.8 billion). The Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) used their legislative majority to pass the bill, which runs until 2033 and has two main funding provisions. One was for NT$300 billion of arms sales already approved by the US for Taiwan on Dec. 17 last year, the other was for NT$480 billion for another arms package expected to be announced by Washington. The bill, which fell short of the NT$1.25
‘CLEAR MESSAGE’: The bill would set up an interagency ‘tiger team’ to review sanctions tools and other economic options to help deter any Chinese aggression toward Taiwan US Representative Young Kim has introduced a bill to deter Chinese aggression against Taiwan, calling for an interagency “tiger team” to preplan coordinated sanctions and economic measures in response to possible Chinese military or political action against Taiwan. “[Chinese President] Xi Jinping [習近平] has directed the People’s Liberation Army to be ready to invade Taiwan by 2027. China has a plan. America should have one too,” Kim said in a news release on Thursday last week. She introduced the “Deter PRC [People’s Republic of China] aggression against Taiwan act” to “ensure the US has a coordinated sanctions strategy ready should
A former television news host and six military personnel — active and retired — have been indicted on espionage charges, Kaohsiung prosecutors said yesterday. Lin Chen-you (林宸佑), a former CTi News host and YouTuber, last year allegedly made videos at the direction of a Chinese agent criticizing the Democratic Progressive Party’s recall campaign, the Ciaotou District Prosecutors’ Office told a news conference in Kaohsiung. He allegedly received 4,325 tether coins for the videos from an unidentified person surnamed Huang (黃), believed to be an agent of a hostile foreign power, they said. Lin, also known as Ma Te (馬德), has a show named
RSS