BoE broadens range of eligible collateral for loans

Bank of England governor Mer-vyn King last week extended the collateral that can be used as security for its short-term loans to include mortgage-backed securities.

He also pledged to increase funding for the short-term auctions he ann-ounced in December in a bid to restore confidence in the money markets.

In a speech at the Treasury, King said: “I assure you that the BoE will provide the liquidity assistance that the system needs to restore confidence.

“Such help can be only a temporary measure but it will be a useful bridge to a longer term solution.”