The Bank of England (BoE) extended its offer of three-month loans against easier collateral today as part of an action by the world's top central banks to calm money markets.
The BoE will offer £10 billion worth of three-month loans on March 18th against a wider range of collateral than normal.
With the credit crunch intensifying around the world, the BoE said G-10 central banks were ready to do whatever was needed to ease a crisis of confidence that has sent interbank lending rates soaring and threatened to choke the world financial system.
The US Federal Reserve, the European Central Bank, the Swiss National Bank and the Bank of Canada all announced measures for their markets.
The BoE said the central banks have been working closely together since December when they made a similar joint announcement. This is known as the Cape Town accord as it was hatched at a meeting in South Africa last year.
The Fed said today it would lend up to $200 billion of Treasury securities for 28 days against a much wider range of collateral than normal. The European Central Bank plans to auction up to $15 billion in extra 28-day dollar refinancing to euro zone banks.