Bank injects £5bn extra in attempt to ease credit turmoil

By David Prosser, Deputy Business Editor
Friday, 21 March 2008

Mervyn King, the Governor of the Bank of England, tried to head off criticism from bank bosses by unveiling new borrowing facilities for the sector yesterday just hours before a summit meeting called to address the credit crisis.

Mr King said he would make an extra £5bn of three-day funding available every week until the next meeting of the Bank’s Monetary Policy Committee, which is scheduled for 9 April. The move follows mounting concern about a continued freeze in lending between the biggest banks, which has sent inter-bank interest rates soaring in recent days.

And it was reported last night that Mr King had told the bosses of Britain’s biggest banks that he is sympathetic to their requests to be able to use, in an emergency, a wider range of collateral, including mortgages, for Bank of England loans.

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