British Banks Pledge Higher-Risk Assets to Secure Cash from the Bank of England
British banks are increasingly using higher-risk credit assets as collateral at the Bank of England (BoE) in exchange for cash, according to a Reuters review. These include loans tied to high-interest store cards and vehicle leases—assets that carry greater risk than traditional government bonds or corporate debt. The shift reflects tighter liquidity conditions and rising borrowing costs amid higher interest rates. On August 18 alone, banks pledged £1.9 billion in such assets for BoE funding. This trend highlights the growing reliance of financial institutions on central bank support to manage balance sheets under stress from a challenging economic environment.
Topics: Bank of England high-interest store cards loans risk vehicle leases