BOE curbs disclosure to quash stigma

The Bank of England will make it easier for financial institutions to borrow emergency funds, joining other central banks in taking steps to tackle dysfunctional markets.

The bank will unveil a discount facility window on Oct 20 allowing banks to swap collateral including illiquid corporate securities for UK government bonds, it said yesterday in London. The central bank will also reduce the penalty rate for institutions seeking overnight funds and curb disclosure rules to eliminate the stigma associated with seeking such help.

"The arrangements set out our liquidity provision in a systematic way to help banks plan their access to central bank liquidity, and so add certainty," Governor Mervyn King said in a statement to journalists.