LONDON (Thomson Financial) - The Bank of England yesterday rejected lobbying
from Britain's banks for it to follow the US Federal Reserve in buying "toxic"
mortgage-backed securities from banks hit by the credit crunch, The Guardian
reported.
Governor Mervyn King is understood to have told the major banks that he will
join the European Central Bank in offering extended loans based on a wider range
of collateral, but he will not follow the Fed, which has agreed to buy more than
100 bln stg of the debt securities at the heart of the crisis, the newspaper
said.
A BoE spokesman told the newspaper that it had been looking at how it could
ease strains in the system. "The Bank is not, however, among those proposing
schemes that would require the taxpayer rather than the banks to assume the
credit risk," he was quoted as saying.
paul.sandle@thomson.com
ps/cmr
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