Bank of England Market Operations Guide: Our tools

Jun 01, 2024

This section of the Guide provides more detail on the market-wide operations and facilities we use to achieve our monetary policy and financial stability objectives. It also covers how firms can apply for access and make use of them. Our ‘open for business’ approach means that where eligible firms meet our supervisory threshold conditions and have appropriate collateral they can sign up to and use our facilities.

Operational readiness and resilience is an area of importance for us. For example, the PRA issues guidance and rules for the firms it regulates concerning this. As part of our role in markets, we undertake our own work to ensure that we are operationally ready and resilient. We conduct regular testing across a range of different market activities, on an ongoing basis.

When we lend to firms we naturally incur risk. To protect public money, we manage that risk in three ways:

Compared with many central banks, access to our operations is open to a relatively wide set of eligible financial firms. Our eligibility criteria apply by type of firm.

We assess whether a particular group of firms should be eligible to participate based on a number of key considerations. These include:

If we judge a category of firm to be eligible for access to the Bank’s facilities, then all firms within that category are eligible to apply. But, only if they individually meet the Prudential Regulation Authority’s (PRA) threshold conditions for authorisation (or a comparable test where firms are not PRA-regulated), and the operational and other requirements set out in our Terms and Conditions and Operating Procedures.

Participating in our operations is generally voluntary, and eligible firms can choose which operations they sign up to. The only exception is if a firm is a direct settling participant of the sterling high-value payment and securities settlement systems ‘CHAPS’ or ‘CREST’. Eligible firms that meet this criterion must hold a reserves account. These are normally coupled with access to our Operational Standing Facility (OSF), which is a key tool for managing reserves balances on an intra-day basis. This is necessary to ensure participation in CHAPS and CREST can occur safely.

Bank APF asset purchases and sales

Reserves accounts

Operational Standing Facilities

Discount Window Facility

Indexed Long-Term Repo

Short - Term Repo

Contingent Term Repo (if activated)

Non-sterling facilities

Alternative Liquidity Facility

Banks/building societies

yes

yes

yes

yes

yes

yes

yes

yes

yes (non-interest-bearing banks only)

Broker-dealers

yes

yes

yes

yes

yes

yes

yes

yes

no

Central counterparties

no

yes

yes

yes

no

no

no

no

no

International Central Securities Depositories

no

yes

yes

no

no

no

no

no

no

Participation is also subject to a range of legal and operational requirements. For instance, if a firm is part of a wider legal group structure, we may ask for a guarantee from another firm within that group.

We also expect participants to give us enough information to manage risks effectively. And, we require all participants to act in a way that is consistent with our objective of achieving competitive and fair sterling markets. Among other things, this can involve contributing to our market intelligence work.

When we lend through our facilities, we require collateral in return. The collateral must be of sufficient quality and quantity to protect our balance sheet from any risk of a counterparty failing to repay what it owes. If this does happen, we can sell or retain the collateral to cover our loss.

The collateral we ask for varies in quality, and not all collateral is eligible for all the facilities we offer.

We accept a broad range of collateral, split into three buckets in terms of liquidity:

We do not normally accept equities as collateral for our facilities, but we have put in place the technical measures to do so at our discretion, should the need arise in the future. Participants wanting more information on this should contact us on [email protected].

Our Sterling Monetary Framework (SMF) liquidity insurance facilities provide a ‘liquidity upgrade.’ This means we allow firms to swap less liquid collateral for the most liquid asset in the economy, central bank reserves.

SMF liquidity insurance facilities accept Level A, B and C collateralfootnote [1], but the price we charge varies depending on the extent of the upgrade provided by the collateral used.

Our SMF operations focussed on implementing monetary policy – OSFs and short-term repos (which are currently inactive) – do not require any liquidity upgrade. For these, we only accept Level A collateral.

Collateral Level

Liquidity InsuranceDiscount Window FacilityIndexed Long-Term RepoContingent Term Repo FacilityNon-sterling Repo

A, B and C

Monetary Policy Implementation

Operational Standing FacilitiesShort-term Repo

A only

Term Funding SchemesTerm Funding Scheme with additional incentives for SMEs

A, B and C

Our collateral list is broad. It extends in principle to any asset we judge we can effectively and efficiently risk manage, subject to an appropriate discount applied to the market value of the asset. This ‘haircut’ is designed to protect us against falls in the value of collateral, so if a counterparty defaults, the sale of that collateral by us raises at least the amount borrowed against it. Higher quality assets offer us greater protection against asset value volatility, and so require lower haircuts.

For Level A, Level B and Level C securities, we publish ‘base haircuts’ on our Eligible collateral page.

Haircuts for Level C loan collateral are calculated for each pool of loans individually. They depend on our qualitative and quantitative assessment of the risks inherent in each portfolio. Haircuts reflect different risk characteristics. We may choose to apply ‘add-ons’ to address other risks that are specific to a particular counterparty or piece of collateral.

Read more about collateral eligibility.

We strongly encourage firms to pre-position a broad range of collateral with us. This can include High Quality Liquid Assets (HQLA) where these are eligible for use as collateral, or come from their broader stock of eligible assets. Once satisfactory due diligence is complete, delivered eligible assets are considered pre-positioned and subsequently may be drawn against.

Pre-positioning allows us to risk assess, price, value collateral and set a suitable haircut in advance of drawdown, therefore allowing firms to use our liquidity facilities more quickly when needed.

We will discuss bilaterally with a firm in what order they would prefer us to use their collateral. We may also require counterparties to give us collateral diversified across a number of issuers (known as a collateral ‘concentration limit’).

Read more about how firms can place and manage their collateral with us.

Reserves accounts are sterling-denominated instant access accounts offered to eligible financial firms that are held in our Real-Time Gross Settlement (RTGS) system. There is currently no maximum or minimum balance for most types of participants.footnote [2]

Reserves accounts are a vital tool for implementing monetary policy since we remunerate reserves balances at Bank Rate, which is set by our Monetary Policy Committee (MPC) eight times a year (roughly every six weeks).

Bank Rate has historically been positive, but could also be zero or negative. Under a negative Bank Rate, the Bank could also choose to apply more than one rate to reserves balances, in a system called tiered remuneration. More information on the operational arrangements for negative rates can be found in our SMF Operating Procedures.

Setting Bank Rate helps meet our inflation target. Additionally, firms that are subject to prudential liquidity requirements can count reserves balances as High Quality Liquid Assets (HQLA). Read more about regulatory requirements.

Reserves accounts can also be used for settlement of payment flows in certain payment systems that settle through the Bank’s RTGS system. Balances held in this account can be used as a source of intraday liquidity by settlement banks.

For certain firms which are not eligible for reserves accounts, we can instead offer standalone settlement accounts, to enable direct participation in payments systems that use our settlement services. More information on settlement accounts is available in our Settlement Account Policy.

Our Operational Standing Facility (OSF) allows participating firms to deposit reserves with us, or borrow reserves directly from us, throughout each business day.

Firms can use this facility as a tool to manage any unexpected or frictional payment shocks that could arise due to technical problems in their own systems, or in the market-wide payments and settlements infrastructure.

The operational standing lending facility consists of an overnight lending transaction collateralised against high-quality, highly-liquid (Level A) assets. We apply a 25 basis point premium (0.25%) above Bank Rate for this facility.

The operational standing deposit facility consists of an overnight deposit transaction. This currently returns 25 basis points below Bank Rate.

We automatically couple reserves accounts (but not settlement accounts) with the OSF for all but the smallest participants.footnote [3] Usage of the OSF is published subject to a lag, on the third Wednesday following the end of the corresponding maintenance period.

The STR is our regular market-wide sterling operation aimed at maintaining control of short-term market interest rates. The STR allows participants to borrow central bank reserves for a one-week period in exchange for high quality, highly-liquid (Level A) assets.

This facility is priced at Bank Rate. Combined with the one-week term, this helps keep short-term market interest rates in line with Bank Rate by ensuring banks have little need to pay above Bank Rate for reserves in money markets.

There is an unlimited supply of central bank reserves available in the operation to ensure that banks’ demand for reserves continues to be met as QE unwind progresses. More information on how the STR supports QT is included on the Our objectives page.

STR operations are market-wide operations conducted using our electronic auctioning system, Btender. We may at our discretion also accept bids from participants by telephone. If Btender is unavailable for any reason, an announcement will be made on our wire services pages.

We will publish the total aggregate use of the STR soon after the close of each auction. We do not publish data regarding specific transactions or counterparties.

We offer a framework of liquidity insurance operations to support our financial stability objective.

We provide these facilities on a regular basis, on demand, and at our discretion.

Some of our facilities are bilateral (ie between us and one firm at a time) and others are market-wide (ie between us and a number of firms at a time). But all SMF facilities operate on published terms that do not vary across participants.

All of our liquidity facilities are intended to support our ‘open for business’ approach. This means there is no presumptive order of usage. An eligible firm can choose to meet a liquidity need by using our liquidity facilities, alongside market sources of liquidity and their own liquidity buffers according to their own preference.

The decision when and how to use facilities is up to each firm. We would not expect firms to rely solely on our facilities for routine day-to-day liquidity management (and we have priced those facilities accordingly). But neither are our facilities intended to be only a last resort.

Bilateral

Discount Window Facility

Firm-specific liquidity need requiring liquidity in bespoke size

Market-wide

Indexed Long-Term Repo

Predictable/regular need for term collateral transformation

Contingent Term Repo Facility

Actual or prospective market-wide stress meaning firms need cheap, plentiful cash at term

We publish usage of our liquidity insurance facilities in a way which complements the objectives of our facilities, and promotes financial stability. Our liquidity facilities are open for business and are intended to be used to meet firms’ liquidity needs as and when they arise.

Our approach seeks to balance transparency with discretion about individual counterparty relationships, and to minimise any potential risks to financial stability through premature publication. That is why usage data is typically only published averaged across counterparties, and why in the case of the DWF, we publish usage with a lag.

The SMF terms and conditions set out the obligations relating to confidentiality in connection with SMF facilities. Our approach seeks to promote our financial stability objective, and we work closely with other authorities (including the Financial Conduct Authority (FCA)) to achieve this.

Firms are of course responsible for their own transparency and disclosure obligations, including compliance with any legal or regulatory requirements.

There are a wide range of circumstances which could give rise to firms using our liquidity insurance facilities, and firms are encouraged to consider these circumstances on a case-by-case basis.

The Discount Window Facility (DWF) is a bilateral facility, where firms can borrow highly liquid assets (gilts or, in certain circumstances, cash) in return for other assets (collateral).

Participating firms need to meet PRA Threshold Conditions and have sufficient eligible collateral. If they meet these requirements, there is a presumption that we will lend via the DWF.

This facility is available on demand. It is intended for firms which anticipate, or experience, a previously unexpected liquidity need. The DWF may be drawn upon to meet such a need as and when required.

Firms should exercise their own judgement in applying for, and using, the DWF as part of effective liquidity management. While use of the DWF – and other sources of liquidity – should be considered alongside a firm’s own liquidity buffers, there is from the Bank’s perspective no presumptive order of usage in terms of drawing down on liquidity buffers before the use of the DWF (or vice versa).

We publish (with a time lag) the average daily value of lending over a calendar quarter, aggregated across counterparties. This is published on the first Tuesday following the final working day of the calendar quarter, five quarters ahead. We do not publish data regarding specific transactions or counterparties.

The ILTR is our regular market-wide sterling operation and forms part of our broader liquidity insurance framework. ILTRs allow market participants to borrow central bank reserves (cash) for a six-month period in exchange for other, less liquid assets (collateral). We will only accept collateral of sufficient quality and quantity to protect ourselves fully from counterparty credit risk.

Through this facility, we use a competitive auction to offer to lend central bank reserves, in the form of sterling cash. Participants can bid for reserves against the full range of eligible collateral.

We have designed the auction to be flexible, to respond to evolving market conditions, by providing more liquidity to the market as demand increases. The ILTR’s response to varying demand is determined before the start of any auction, and we periodically review the appropriateness of this calibration.

The signal of higher demand for cash is the price participants are willing to pay in our auction:

The auction applies a single clearing spread to each collateral set, which means:

Participants should bid the maximum price they would be willing to pay for funds against each collateral set, to be more likely for the bid to be allocated in full.

1. On the day of auction, counterparty firms will bid for reserves, against a range of collateral, at the maximum spread to Bank Rate they are willing to pay. Not all firms will be successful in their bids (eg counterparty B).

2. Firms will receive cash in return for collateral.

3. Six months from the auction date, firms will repay the cash plus fees, and will receive the collateral back. If the fee rate is negative (for instance if Bank Rate is negative), then we would pay a fee to the counterparty.

ILTR operations are market-wide operations conducted using our electronic auctioning system, Btender. We may at our discretion also accept bids from participants by telephone; participants without access to Btender should submit their bids by telephone to the Sterling Desk. If Btender is unavailable for any reason, an announcement will be made on our wire services pages.

We publish the total aggregate use of the ILTR soon after the close of each auction. We do not publish data regarding specific transactions or counterparties.

The Contingent Term Repo Facility (CTRF) allows us to provide liquidity against the full range of eligible collateral at any time, term, and price we choose. We can activate it in response to any actual or prospective market-wide event. This enables us to respond to a market stress in a flexible way. We take prevailing market conditions into account when we set the terms. The CTRF is not in routine use, but is available to be used when market conditions or other factors mean a tool is needed in addition to our other facilities. The CTRF is deliberately designed with flexibility in mind, so as and when we judge it appropriate to activate a CTRF, we calibrate its pricing and terms to suit the needs of the market at that time.

Most recently, we announced the activation of the CTRF in March 2020, to help manage the market disruption caused by the outbreak of the Covid-19 flu pandemic. This was in place until June 2020. Further information can be found in this Market Notice.

We decide what information to publish about the facility’s usage when we activate it. This is normally in line with other facilities, eg we include total aggregate use of the facility following the close of the operation.

In March 2020, during heightened market uncertainty caused by the Covid-19 virus, the MPC introduced the Term Funding Scheme with additional incentives for SMEs (TFSME). The TFSME was designed to:

We published a TFSME Market Notice, TFSME operating procedures and TFSME terms and conditions providing more details on the operation of the TFSME.

The TFSME is now closed to new drawings. Loans were offered over a period which ran from April 2020 to October 2021.

Participants may terminate any transaction, in part or in full, before its maturity date. The interest rate on TFSME transactions is equal to Bank Rate plus a Scheme fee (TFSME Fee).

Participants (within a given TFSME group of related firms) were permitted to draw down an amount up to their “Borrowing Allowance”. This was calculated from an “Initial Allowance” based on the amount of lending they had done, plus an “Additional Allowance”. The Additional Allowance was composed of two parts:

Participants in the Term Funding Scheme (TFS) launched by the Bank in 2016 were permitted to repay TFS drawings and redraw in the TFSME, subject to having sufficient Borrowing Allowance in the TFSME.

We publish the size of each Participants’ outstanding drawings, and each TFSME Group’s Base Stock and Net Lending data, quarterly with a lag. Details of aggregate TFSME drawings are also published weekly on our website.

We hold a stock of purchased assets through the Asset Purchase Facility (APF) as part of quantitative easing (QE), which is currently being reduced as QE is unwound. Our stock of purchases includes assets in the form of government and corporate bonds with the aim of lowering the ‘yield’ or ‘interest rate’ on those assets. This incentivises investors to move funds into other types of assets. In turn that feeds through to lower interest rates offered on loans for households and businesses, since rates on government bonds tend to affect other interest rates in the economy.

In February 2022, the MPC decided to begin to reduce its stock of asset purchases by no longer reinvesting maturing government and corporate bonds, and by a programme of corporate bond sales. In August 2022, the MPC announced its intention to commence a UK government bond sales programme, subject to economic and market conditions being judged appropriate at the time of a confirmatory vote. In September 2022, the MPC agreed to reduce the stock of UK government bond purchases by an amount of £80 billion over the next twelve months, comprising both maturing gilts and gilt sales, to a total of £758 billion.

The ultimate private sector owners of these types of assets are primarily non-banks, so the majority of our purchased assets were previously held by these investors and they are likely to play an important role in absorbing any assets sold. Banks and broker-dealers act as intermediaries in the process.

We carry out any asset purchase or sale operations for monetary policy purchases in a transparent and non-discretionary manner. The competitive auction element of the operations uses our Btender system.

At present we are not making new purchases of gilts, following the MPC’s decision to reduce the stock of UK government bond purchases by no longer reinvesting maturing assets.

In September 2022, the MPC voted to begin the sale of UK government bonds held in the Asset Purchase Facility. It agreed to reduce the stock of UK government bond purchases by an amount of £80 billion over the next twelve months, comprising both maturing gilts and gilt sales, to a total of £758 billion. Details of the auction approach have been set out in a Market Notice, and the operational schedule made available on our website.

When in operation, gilt purchases and sales are undertaken via auctions which work in the following way:

At present we are not making new purchases or sales of corporate bonds, following the MPC’s decision to unwind fully the stock of corporate bonds. Planned sales were completed in June 2023 and a small number of very short maturity bonds will continue to be held in the portfolio, maturing fully by 5 April 2024.

When we were building up our corporate bond holdings between 2016 and 2022, we purchased a balanced portfolio of corporate bonds across eligible issuers and sectors. We purchased a representative portion of the market, so we did not influence the allocation of credit to particular companies or sectors of the economy.

To maximise the effectiveness and efficiency of the economic stimulus, we limited our purchases to investment-grade bonds issued by companies that make a material contribution to economic activity in the UK. These companies may be incorporated in the UK or in other jurisdictions, but they will have a genuine business in the UK. For example, they will contribute to employment or revenue generation in the UK, or will service a large number of customers in the UK.

Corporate bonds issued by firms we regulate – such as banks, building societies, and insurance companies – were not eligible. We published the full bond eligibility criteria.

When in operation, corporate bond purchases and sales were undertaken in the following way:

The Bank of England, the Bank of Canada, the European Central Bank, the Federal Reserve, the Bank of Japan and the Swiss National Bank have an established network of standing bilateral swap lines. These allow liquidity to be provided in each jurisdiction in any of the five currencies foreign to that jurisdiction, if the two central banks in a particular bilateral swap arrangement judge that market conditions warrant such action in one of their currencies.

To support our financial stability objective, we use these swap lines, supplemented with other arrangements if required, to offer short-term repo transactions with participating firms in selected other currencies, against the full range of collateral. The frequency of these operations is at our discretion, in agreement with the relevant central bank; they currently take place weekly for US dollars.

Participation:

Non-sterling currency operations are market-wide operations conducted using our electronic auctioning system, Btender. We may at our discretion also accept bids from participants by telephone to our sterling money market desk. Participants without access to Btender should submit their bids by telephone to the Sterling Desk. If Btender is unavailable for any reason, an announcement would be made on our wire services pages.

We publish the total aggregate use of our non-sterling currency operations on our website soon after the close of each auction. We do this for each currency, currently US dollar and previously also for euro. We do not publish data regarding specific transactions or counterparties.

Are you an eligible financial firm? Find out more about USD Repo Operations.

The Alternative Liquidity Facility (ALF) is a fund-based deposit facility available to UK banks which face formal restrictions on engaging in interest-bearing activity. These firms are unable to participate in the Bank’s other facilities under the Sterling Monetary Framework (SMF).

Deposits in the ALF are backed by a portfolio of high quality eligible assets, which could include eligible fixed-income bonds or sterling cash held on a non-interest bearing account. These deposits and backing assets are held on a segregated basis by a separate entity – the Bank of England Alternative Liquidity Facility Limited (BEALF), which is a wholly owned subsidiary of the Bank.

Returns generated from the backing fund may be passed back to depositors in lieu of interest, net of hedging and operational costs. Relatedly, the deposit capacity of the ALF is limited to the size of the backing fund, which is currently £200 million and may be reviewed from time to time.

Deposits in the ALF are treated as ‘Level 1’ HQLA for the Liquidity Coverage Ratio (LCR) under the Capital Requirements Directive and Capital Requirements Regulation. For the ALF’s participants, this enables greater flexibility in meeting regulatory requirements under Basel III prudential rules.

Participation:

We publish the aggregate use of our ALF operations on our website, averaged over a monthly reporting period and with a one quarter lag. We do not publish data regarding specific transactions.

We publish a list of the assets that form the composition of the ALF backing fund. This information is updated when there are changes to asset composition.

Are you an eligible financial firm? Find out more about applying to the ALF.

We have previously launched a number of temporary facilities and schemes to help us to achieve our objectives of monetary and financial stability. This section provides details of these facilities and schemes that were launched after 2012 but have now been closed to new drawings and any remaining stock or transactions have matured.

In conjunction with HM Treasury, we launched the FLS in July 2012, during the euro area debt crisis. The crisis had caused a sharp increase in bank funding costs, impairing the flow of credit around the UK banking system.

Our objective with the FLS was to encourage lending to households and companies, The scheme did this by providing funding to banks and building societies for an extended period, at below market rates, with both the price and quantity of funding provided linked to their performance in lending to the UK real economy.

We subsequently revised the design and extended the availability of the FLS in April 2013. We did this to increase the incentives for banks to lend to small and medium-sized enterprises. We announced further extensions in December 2014 and November 2015.

The FLS is now closed to new borrowers. Loans were offered from August 2012 to January 2018. The final FLS loans were repaid in September 2021.

Further information on how the FLS was operated.

Total outstanding FLS drawings reached a peak of nearly £39 billion in September 2016.

A total of 36 banks and building societies drew from the FLS. The 46 banks and building societies that signed up to the facility had a combined borrowing allowance of over £70 billion.

A full time series of aggregate net drawings from the FLS is available in our database. Counterparty specific data on drawings, borrowing allowances and lending is linked in the explanatory notes.

In August 2016, the MPC introduced a Term Funding Scheme (TFS). Its primary objective was to reinforce the pass through of the cut in Bank Rate at that time to the interest rates faced by households and companies in the wider market. This allowed the reduction from 0.5% to 0.25% to have broadly the same impact as cuts made when rates were further from zero.

The design of the scheme reflected this primary objective, and it was calibrated so that the reduction in Bank Rate could have a broadly neutral impact on lenders’ margins in aggregate.

The TFS provided four-year funding to eligible firms, in the form of central bank reserves, at rates close to Bank Rate, and against the full range of eligible collateral. This helped it meet its objectives in broadly two ways. First, by giving access to a significant amount of funding at rates at or close to Bank Rate, the TFS directly lowered average funding costs, allowing that reduction to be passed on to borrowers. Second, indirect funding costs were reduced, as the TFS reduced the amount of debt that lenders would need to issue in the market.

The price and amount of funding available was linked to the quantity of participants’ net real economy lending over a reference period. The TFS was originally launched with a government indemnity. But in January 2019, after we received a capital injection from the Government, all loans and the collateral backing them were transferred from the Asset Purchase Facility (APF) to our own balance sheet.

The TFS is now closed to new drawings. Loans were offered from September 2016 to February 2018. The final TFS drawings were repaid in February 2022.

Further information on how the TFS was operated.

The scheme offered £127 billion of loans across the drawings period.

A total of 62 banks and building societies drew from the TFS. Of these, 54 participants delivered positive net lending between July 2016 and December 2017 and as a result qualified for a lower interest rate on their borrowings.

A full time series of aggregate drawings, repayments and maturities for the TFS is available in our database. Counterparty specific data on drawings and lending is linked in the explanatory notes.

In conjunction with HM Treasury, we launched the CCFF in March 2020, during the Covid-19 crisis. The CCFF offered funding to large employers who would normally raise funds through the financial markets.

The aim of the CCFF was to help keep companies in business and able to pay employee wages and suppliers, helping them to bridge disruption to their cashflows as a result of the Covid-19 economic shock. By lending to large companies directly, the CCFF protected the space for banks to lend to the wider population of companies, complementing other Bank of England and Government schemes at the time.

Funding was made available through the purchase of short-term debt in the form of commercial paper. Participating companies could offer commercial paper to the CCFF with a maturity of one week to twelve months in daily operational windows. The CCFF offered funding at prices comparable to those prevailing in markets in the period before the Covid-19 economic shock. Commercial paper was purchased at a spread above a reference rate, based on the current sterling overnight index swap (OIS) rate. The spread offered was dependant on the company’s credit rating.

To be eligible, companies had to be large employers in the UK or play an important role in our economy. They also needed to have been in sound financial health before the Covid shock. Financial companies and public authorities were not able to apply. From May 2020, for purchases of any commercial paper maturing after May 2021, companies had to commit to restraints on their capital distributions and senior pay.

The CCFF closed to new purchases in March 2021 and all commercial paper matured or was sold back to the issuer by March 2022.

The CCFF lent more than £37 billion to 107 different companies. In May 2020, there was over £20 billion worth of commercial paper held by the CCFF.

The combined borrowing capacity of the more than 230 companies that signed up to the facility reached a peak of over £85 billion. These companies were responsible for almost 2.5 million jobs in the UK at the time.

A full time series of commercial paper purchases, and net amounts outstanding in the CCFF is available in our database. Counterparty specific data on net amounts outstanding in the CCFF is linked in the explanatory notes.

Between 28 September and 14 October 2022, the Bank of England, in line with its financial stability objective, conducted temporary and targeted purchases of index-linked and long-dated conventional UK government bonds (gilts). The purpose of these purchases, was to act as a temporary backstop to restore orderly conditions in the market for index-linked and long-dated UK government bonds (gilts), and in doing so, reduce risks from contagion to credit conditions for UK households and businesses.

The gilts purchased in these operations were held within a segregated portfolio of the Asset Purchase Facility. In total, the Bank purchased £19.3bn of gilts, of which £12.1bn were long-dated conventional gilts and £7.2bn were index-linked gilts.

Further details of the Bank’s financial stability gilt purchases can be found in the 28 September 2022 news release and Market Notice as well as the 11 October 2022 news release and Market Notice. The APF Quarterly report for Q4 2022 also includes further information regarding the Bank’s financial stability intervention.

The Bank began unwinding these gilt purchases on 29 November 2022, consistent with its commitment that its intervention would be temporary in nature. The portfolio was unwound in a way that was timely but orderly. The Bank ran a series of reverse enquiry windows during which eligible counterparties could bid for the gilts held in this portfolio. This approach allowed the Bank to meet demand for gilts where it existed, while limiting the impact of such sales on wider market conditions. Further details of the demand-led sales approach can be found in the 10 November news release.

As confirmed in the 12 January 2023 news release, the Bank announced that it had completed its sales of the £19.3bn portfolio of temporary holdings of UK government bonds.

In total, between 28 September and 14 October, the Bank purchased £19.3bn of gilts, of which £12.1bn were long-dated conventional gilts and £7.2bn were index-linked gilts. Sales of assets in the financial stability portfolio began on 29 November and were fully completed by 12 January 2023.

Data on the value of each of the bonds bought under the Bank's temporary financial stability gilt purchases is published here.

A detailed breakdown of the results of these gilt sales, including in nominal and sales proceeds terms, is provided in the spreadsheet below. This data is reported on a trade date basis.

On 10 October 2022 and in line with its financial stability objective to avoid dysfunction in core funding markets, the Bank launched the Temporary Expanded Collateral Repo Facility (TECRF). The facility enabled banks to help ease liquidity pressures facing their client LDI funds through liquidity insurance operations. The facility closed on 10 November 2022. See the full news release: Bank of England announces additional measures to support market functioning.

The Bank does not publish data on individual transactions within the Temporary Expanded Collateral Repo Facility. Following the facility’s closure, the Bank published aggregate usage of the scheme on 17 November 2022.

Except for central counterparties (CCPs), which are not permitted to use Level C assets as collateral.

Except for central counterparties (CCPs) and International Central Securities Depositories (ICSDs), which are required to maintain a pre-agreed average target balance for each maintenance period.

Further information is available upon request on eligibility criteria for reserves account only access to the SMF.

Further information is available upon request on eligibility criteria for reserves account only access to the SMF.

Except for central counterparties (CCPs) and International Central Securities Depositories (ICSDs), which are required to maintain a pre-agreed average target balance for each maintenance period.

Except for central counterparties (CCPs), which are not permitted to use Level C assets as collateral.

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