The Bank of England (BoE) announced on Thursday, September 17, that the Monetary Policy Committee (MPC) had voted unanimously to leave its benchmark bank rate at 0.1 percent whilst also maintaining the target for the total stock of asset purchases under its quantitative-easing (QE) programme at £745 billion.
Taking on the mantle of governorship of a central bank is challenging, but for Andrew Bailey, the new governor of the Bank of England, the role couldn’t be more formidable. With the United Kingdom’s long-awaited divorce from the European Union around the corner, the country’s financial system will need all the help it can get to survive the inevitable turbulence. Bailey’s new job won’t be a walk in the park!
Transitioning from the London Interbank Offered Rate to the risk-free rate alternatives such as SONIA and SOFR was at one time a recommendation but is becoming a requirement, as the FCA’s LIBOR support will cease at the end of 2021. Transitions spell challenge, and this is true of the bond market as it faces LIBOR’s demise. What are some potential solutions that bond issuers should consider, especially for legacy bonds?
The stewardship responsibility of today’s bank has become more complicated in the light of climate change. Not only does a bank need to be cognizant of its responsibility to safeguard customer finances but also the future of the planet on which we all live. Green finance is an ever more significant influence on the decisions made by bankers determined to reconnect with the needs of society in more ways than just financial.