Sterling Money Markets: Beneath the Surface
15 Pages Posted: 19 Dec 2018
Date Written: March 23, 2018
◦This article presents analysis based on the Bank’s new Sterling Money Market data collection.
◦The vast majority of unsecured money market activity is in the overnight market that underlies the SONIA benchmark. Longer-maturity trades are scarce and have volatile daily average interest rates.
◦We present evidence that suggests the overnight unsecured market is dynamic and competitive, and show that average rates in the overnight gilt repo market vary according to the collateral used.
◦These observations support market-led efforts to promote the use of SONIA in sterling markets.
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