Central Banking

More central clearing could have eased Covid shock – BoE paper

Efficiencies for dealer balance sheets could allow banks to play greater stabilising role, authors say


More widespread central clearing in UK government bond (gilt) markets could have eased stress on the system during the March 2020 ‘dash for cash’, a new working paper finds.

During the Covid crisis, institutions across the financial sector, including central banks, sold large quantities of bonds to raise cash. Dealers struggled to keep up with the selling pressure, in part due to the risk of breaching their Basel III leverage ratios. Several central banks intervened as market-makers of last

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FedNow – at last

The instant payment system might help fix the US’s rusty payment rails, but it also faces competition, says Dave Birch

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