STERLING MONEY MARKETS

BANK OF ENGLAND OPERATIONS

The Sterling Money Markets are regulated by the Bank of England via its money market operations. The Bank’s operations serve both of its core purposes of implementing  the Monetary Policy Committee’s decisions in order to meet the inflation target and of reducing the cost of disruption to the liquidity and payment services supplied by banks to the UK economy.

The Bank is able to undertake both tasks because it is the sole supplier of central bank money in the United Kingdom. Central bank money takes two forms – the banknotes used in everyday transactions, and balances (reserves) that are held at the Bank by banks and building societies.

The permanent framework governing the Bank’s operations in the sterling money markets is known as the “Sterling Monetary Framework” and is set out in the Bank’s Red Book.

 

MONEY MARKET COMMITTEE

The Money Market Committee (MMC) was established in 1999. It comprises representatives from market participants, trade associations and the authorities. It provides a forum for discussion of structural issues concerning money markets. Minutes of meetings, which are usually held quarterly, are published on the Bank of England website.

The LMMA has been a member of the Money Market Committee since its inception.

 

SECURITIES LENDING AND REPO COMMITTEE

The Securities Lending and Repo Committee (SLRC) was formed by the Bank of England in 1990. It is a UK-based committee of international repo and securities lending practitioners and representatives of trade organisations, together with bodies such as Euroclear UK and Ireland, the UK Debt Management Office, the London Stock Exchange and the Financial Services Authority. The committee provides a forum in which structural (including legal) developments in the relevant markets can be discussed by practitioners and the authorities. It is chaired and administered by the Bank and the LMMA has been a member of the committee since 1997.

 

Links

Bank of England     www.bankofengland.co.uk

MMLC     www.bankofengland.co.uk/markets/Pages/money/smmlg.aspx

SLRC     www.bankofengland.co.uk/markets/Pages/gilts/slrc.aspx

Financial Conduct Authority    www.fca.gov.uk

H M Treasury    www.hm-treasury.gov.uk

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