The United Kingdom's Secured Commercial Paper Facility (U.K. GFC)

Journal of Financial Crises: Vol. 2 : Iss. 3, 474-487. Available at: https://elischolar.library.yale.edu/journal-of-financial-crises/vol2/iss3/21

Yale Program on Financial Stability Working Paper

14 Pages Posted: 26 Oct 2020

See all articles by Claire Simon

Claire Simon

Yale University - Yale Program on Financial Stability

Date Written: October 10, 2020

Abstract

In mid-2009, the Bank of England (Bank) opened the Secured Commercial Paper Facility (SCPF) as part of its larger Asset Purchase Facility (APF). Through the facility, the Bank offered to purchase secured commercial paper (SCP), a form of asset backed commercial paper, issued by approved programs from both dealers acting as principal in the primary market and after issue from secondary market holders. The facility was designed to establish the Bank as a ready buyer of SCP in the primary market and as a backstop purchaser in the secondary market. In extending the APF to include purchases of SCP, the Bank aimed to give smaller companies and companies below investment grade quality access to funding, and to improve access to short term working capital for companies that affected the UK economy. To be eligible to participate, programs had to have underlying assets that provided short term credit to borrowers making a material contribution to the UK economy. Only one program was deemed eligible, and the Bank made regular, small purchases of SCP from that program between November 2010 and November 2011. The SCPF was formally closed on August 4, 2016.

Keywords: secured commercial paper, backstop purchaser, Bank of England

JEL Classification: G01,G28

Suggested Citation

Simon, Claire, The United Kingdom's Secured Commercial Paper Facility (U.K. GFC) (October 10, 2020). Journal of Financial Crises: Vol. 2 : Iss. 3, 474-487. Available at: https://elischolar.library.yale.edu/journal-of-financial-crises/vol2/iss3/21, Yale Program on Financial Stability Working Paper, Available at SSRN: https://ssrn.com/abstract=3717698

Claire Simon (Contact Author)

Yale University - Yale Program on Financial Stability

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
16
Abstract Views
197
PlumX Metrics