Friday May 16, 06:41 AM
UK's biggest banks eye 80-90 bln pound in mortgage asset swaps - report
LONDON (Thomson Financial) - The UK's biggest banks are preparing to swap 80 billion to 90 billion pound of mortgage-backed assets for Treasury bills with the Bank of England, the Financial Times reported, citing debt market sources.
The amount is almost twice as much as the 50 billion pounds envisaged when the central bank unveiled its scheme last month in an attempt to jump-start debt markets paralysed since last summer by the global credit crunch.
The banks approached credit rating agencies about how to structure deals that will receive the triple A rating required for securities that lenders want to swap for Treasury bills that can then be used to raise cash, the sources said.
The move comes amid signs that lending in the interbank market is becoming particularly tight for banks that cannot post collateral to ensure their debt will be repaid, the paper reported.
|
Send Article by Email
