Bailey raises possibility of setting bigger liquidity buffers
BoE governor says “we can’t assume” current buffers are still appropriate
Bank of England governor Andrew Bailey raised the possibility of expanding banks’ liquidity buffers to better protect against rapid deposit flight, in remarks on April 12.
Bailey noted the collapse of Silicon Valley Bank (SVB) highlighted how current technology allows news to spread fast, and means people can rapidly transfer their money out of a troubled bank.
“We can’t assume that, going forwards, the current answer on the total size of liquidity protection is the correct one,” he said
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