Bank of England to allow lenders to borrow from it in euros to help bolster financial system
The Bank of England has said it will allow lenders to borrow from it in euros from next week in a move to help bolster the financial system in the run-up to Brexit.
The Bank said the move was a "prudent and precautionary step" and comes after it last week announced it would allow banks to access extra funds to ensure they do not run out of money amid Brexit, with weekly liquidity auctions from the start of March.
The latest news came as it warned over "significant market volatility" in the event of a disorderly Brexit in its latest Financial Policy Committee (FPC) meeting report.
But it said most risks that could arise from a disruptive no-deal have been "mitigated", with the core UK financial system "resilient to, and prepared for, the wide range of risks it could face, including a worst-case disorderly Brexit".
The Bank reiterated warnings that EU authorities still needed to do more to help prevent disruption from Brexit.
In its FPC report, it said: "Some disruption to cross-border services is possible and, in the absence of other actions by EU authorities, some potential risks to financial stability remain.
"Although these would primarily affect EU households and businesses, they could also be expected to spill back to the UK in ways that cannot be fully anticipated or mitigated."