{"id":2478,"date":"2007-12-03T12:36:42","date_gmt":"2007-12-03T12:36:42","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2478"},"modified":"2025-03-27T15:48:31","modified_gmt":"2025-03-27T15:48:31","slug":"uk-interbank-lending-worries-exaggerated","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2478","title":{"rendered":"UK interbank lending worries exaggerated"},"content":{"rendered":"<p>Market participants are discussing reports of a massive contraction in sterling interbank lending activity since the onset of the &ldquo;credit crunch&rdquo; in August. According to Bank of England figures, the outstanding value of UK banks&rsquo; market loans to other UK banks fell from &pound;640 billion at the end of August to &pound;249 billion in September and &pound;186 billion in October (see <a href=\"http:\/\/www.bankofengland.co.uk\/statistics\/ms\/2007\/Nov\/tabb1.2.xls\" target=\"_blank\">here<\/a>, P44, bottom panel). However, the figures have been distorted by two major banking groups &ndash; apparently HBOS and Bank of Ireland &ndash; consolidating the reporting of their subsidiaries. Intra-group lending between these subsidiaries was previously included in the Bank&rsquo;s series for total interbank loans but is now being netted out. According to the Bank&rsquo;s statisticians, after adjusting for such &ldquo;changes in the reporting population&rdquo; interbank lending has contracted by only &pound;3 billion &ndash; not &pound;454 billion &ndash; between August and October (see top panel in above table). <\/p>\n<p>Our MPC-ometer model suggests a narrow 5-4 vote in favour of a 25 b.p. rate cut this week but the argument that easing is needed to offset a seizure of interbank lending activity is a red herring. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Market participants are discussing reports of a massive contraction in sterling interbank lending activity since the onset of the &ldquo;credit crunch&rdquo; in August. According to Bank of England figures, the outstanding value of UK banks&rsquo; market loans to other UK banks fell from &pound;640 billion at the end of August to &pound;249 billion in September [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2478","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2478"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2478\/revisions"}],"predecessor-version":[{"id":4787,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2478\/revisions\/4787"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}