Confusion and the BoE’s corporate bond buying scheme

This is on the back of the Bank of England’s release of some more info on its Corporate Bond Purchase Scheme (CBPS) on the 12th. From that:

We will look to purchase, via the CBPS, a portfolio of up to £10bn of sterling investment grade bonds representative of issuance by firms making a material contribution to the UK economy, in order to impart broad economic stimulus. Our operations will be designed to purchase a balanced portfolio of bonds across eligible issuers and sectors, so that we purchase a representative portion of the market and do not influence the allocation of credit to particular companies or sectors of the economy. The private market will continue to decide which companies can issue in the primary market. Corporate bonds issued by firms we regulate – such as banks, building societies, and insurance companies – will not be eligible.

This notice outlines in more detail how we decide what constitutes a material contribution to the UK economy, and how our operations have been designed to ensure our purchases are representative across the eligible set of bonds. Operational details are included in the Market Notice.

Continue reading: Confusion and the BoE’s corporate bond buying scheme

This is on the back of the Bank of England’s release of some more info on its Corporate Bond Purchase Scheme (CBPS) on the 12th. From that:

We will look to purchase, via the CBPS, a portfolio of up to £10bn of sterling investment grade bonds representative of issuance by firms making a material contribution to the UK economy, in order to impart broad economic stimulus. Our operations will be designed to purchase a balanced portfolio of bonds across eligible issuers and sectors, so that we purchase a representative portion of the market and do not influence the allocation of credit to particular companies or sectors of the economy. The private market will continue to decide which companies can issue in the primary market. Corporate bonds issued by firms we regulate – such as banks, building societies, and insurance companies – will not be eligible.

This notice outlines in more detail how we decide what constitutes a material contribution to the UK economy, and how our operations have been designed to ensure our purchases are representative across the eligible set of bonds. Operational details are included in the Market Notice.

Continue reading: Confusion and the BoE’s corporate bond buying scheme