New bank of England boss promises fresh measures to fight Covid-19

The new Bank of England boss, Andrew Bailey, has promised a fresh set of measures to help fight the economic “emergency” faced due to the coronavirus outbreak.

Bailey, who has only been in the position for three days after taking over from former Bank Of England chief Mark Carney, told Sky News “nothing is off the table” and that the Bank is “not done”.

When asked, Bailey also did not rule out radical measures such as cutting rates to zero, quantitative easing or even printing money to give directly to households.

It’s important to note that Bailey has previous experience operating during a financial crisis, as back in 2008 he was responsible for the Bank’s special operations to resolve problems in the banking sector, and was involved in the government’s rescue of Royal Bank of Scotland and HBOS. 

The news comes as The Bank of England announced that The Covid Commercial Financing Facility (CCFF, the Facility) will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy. 

It said the facility will help businesses across a range of sectors to pay wages and suppliers, even while experiencing severe disruption to cashflows.

It will also offer financing on terms comparable to those prevailing in markets in the period before the Covid-19 economic shock, and will be open to firms that can demonstrate they were in “sound financial health prior to the shock”. 

The facility will look through temporary impacts on firms’ balance sheets and cash flows by basing eligibility on firms’ credit ratings prior to the Covid-19 shock. Businesses do not need to have previously issued commercial paper in order to participate.

The scheme will operate for at least 12 months and for as long as steps are needed to “relieve cash flow pressures on firms that make a material contribution to the UK economy”.