Must be broader and longer

Author: | Published: 17 Nov 2008

On September 18 2008, the Bank of England announced that it would extend the Special Liquidity Scheme (SLS) for an additional three months, to January 30 2009. The Bank stated that the extension was designed to provide "additional time for banks to plan their access to the scheme in an orderly fashion". The Bank also stressed that the SLS rules will not change: the nature of qualifying assets, the interest rates offered by the Bank and the haircuts applied to SLS assets remain the same.

The existing SLS was due to end on October 20 2008, but pressure from many quarters, including the Council of Mortgage Lenders, has led the Bank to perform a U-turn in its policy on the provision of liquidity to UK financial institutions since the onset of the credit crisis in August 2007. It is arguable that this is a fair assessment, although only a week...