LONDON—Leading British commercial banks met the Bank of England on Friday to discuss treasury issues, but expanding a plan to swap their mortgage assets for funds was not discussed, the central bank said.
Banks did not discuss widening the collateral they can put up for the funds, such as including mortgages written in the last year, the BoE said, after people familiar with the matter had said this could be on the agenda.
"There are no such discussions taking place and this was a regular meeting with banks," a spokesman for the BoE said.
Funding costs remain high in financial markets as an economic slowdown deepens and analysts estimate banks have already taken the 50 billion pounds ($99 billion) earmarked for them when the special liquidity scheme was unveiled in April. The scheme was aimed at easing the impact of the credit crunch.
Under that plan, a limit for funds on offer was never set, so banks would be able to continue accessing the pool of liquidity even if the 50 billion had been provided.
The sources had said Friday's meeting could fine-tune details of the scheme, but had told Reuters there would not be any major changes.
It was attended by officials such as heads of bank treasury departments, rather than CEOs and other top executives, the sources said.
The BoE and other central banks are attempting to restore confidence in markets but banks remain wary of lending to each other, as they don't know each others' exposure to risky assets and many banks want to hold on to their cash.
