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Bank 'considering other options' to boost lending

Bank 'considering other options' to boost lending

Category: Loans

Updated: 16/02/2009
First Published: 16/02/2009

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The Bank of England is having to take further steps to ensure that institutions provide more secured and unsecured loans, it has been noted.

Charles Davis, of the centre for economics and business research, explained that the Bank is looking for new solutions in addition to lowering interest rates.

Commenting on the announcement that an Asset Purchase Facility (APF) will be introduced, he suggested that the measure will be used to provide lenders with more money.

"It is one of the next steps beyond conventional monetary policy," he said, adding that this "has not been working as well as we would have hoped and has been normal up until recently".

Under the APF, £50 billion worth of assets such as commercial paper and corporate bonds are being bought by the Bank, although Mr Davis stated that this amount is "probably not enough" to boost lending by the desired amount to aid an economic recovery.

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