U.K. Chancellor Alistair Darling Says Central Banks Must Aid Financial System
U.K. Chancellor Darling says central banks must aid financial system through turmoil and said "we all have a duty" to maintain the integrity of the financial system. Darling said that it is crucial that global authorities act together to reduce turmoil and tighten the system but also called for banks to increase transparency, and tighten up their lending. Yesterday, the BoE offered GBP 5B in an exceptional 3-day repo offering, which was well oversubscribed as financial institutions scramble to secure short-term lending. The BoE is to present a range of reforms to the central bank's money market operations, which will include a permanent liquidity insurance scheme as the special liquidity scheme currently in place, will close as previously announced on October 21. However, Governor King has long stressed that central banks cannot and should not provide long-term funding for the banking sector, but that it can help to ease short-term borrowing needs.