UK gap

Banks in the UK collectively managed the gap between borrowers and savers up until the millennium. Even in 2001 the funding gap was zero, according to Robert Peston, the BBC's business editor. But Bank of England figures show that by 2008 there was a L625 billion gap between the money lent by t...

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Bibliographic Details
Published in:Financial Management 2009-03, p.12
Main Author: Moxon, David
Format: Article
Language:English
Subjects:
Bank assets
Bank liquidity
Banking industry
Banks
Funding
Online Access:Get full text
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Summary:Banks in the UK collectively managed the gap between borrowers and savers up until the millennium. Even in 2001 the funding gap was zero, according to Robert Peston, the BBC's business editor. But Bank of England figures show that by 2008 there was a L625 billion gap between the money lent by the banks and what they took in through deposits. It meant that more than one bank was reliant on the inter-bank market as a source of liquidity for funding, which in turn relied on confidence within the market. The question that seemed to be bat in this global maze was: whose assets was each bank actually holding, because these had passed through more than one level of trading.
ISSN:1471-9185