Calling liquidity ample while reviewing whether you can see the market
The Bank of England's September money market minutes certify calm without publishing a single figure — and a parallel committee records that the Bank is checking whether its data powers still reach the market.
The Bank of England is Britain's central bank. Money markets are where banks and funds lend each other cash for days or weeks, and the Bank runs a committee with those firms to keep track of how that market is working. The Bank is also changing how it supplies cash to banks: instead of leaving the system awash with money created by past bond-buying, it now lends cash out against collateral. The September minutes of that committee were published this month.
The September minutes certify ample liquidity without publishing a single number, while the Bank records elsewhere that it is checking whether its data powers still reach the market. Reassurance is not evidence, and a repo-led framework runs on evidence.
The word doing the work
“Ample.” That is the load-bearing word in the Bank of England’s September money market minutes, and there is not a single number underneath it.
The Money Markets Committee is a forum where the Bank sits down with the banks, brokers and funds that trade sterling cash and collateral — unsecured deposits, securities lending, repurchase agreements, the market in which one firm sells securities to another for cash and agrees to buy them back. It met at Moorgate on 25 September; the minutes went up on 13 October. They record that the Chair “updated on recent usage of the Bank’s market-wide repo facilities” and that this usage was consistent with the intended transition to a repo-led operating framework. They do not record what the usage was.
That omission is not procedural fussiness. It goes to the only thing that makes the new framework work.
What the transition actually asks of banks
Under quantitative easing, the Bank bought gilts and paid for them with newly created central bank reserves. The banking system ended up swimming in cash it had not asked for. Under quantitative tightening — the subject of the Monetary Policy Committee’s September decision, and of the exchange of letters between the Governor and the Chancellor that the minutes reference — that stock drains away. In its place the Bank intends banks to bid for reserves themselves, weekly, handing over collateral and taking cash.
For that to work, banks have to bid freely and in size. The enemy is stigma: the fear that being seen at the central bank’s window marks a firm as weak. The Bank’s answer to stigma has been to repeat that use of the facilities is normal and expected, and the September minutes do exactly that in a single clause.
But a sentence of reassurance in a minute is the weakest possible instrument against stigma. What kills stigma is a published series showing lots of healthy institutions borrowing a lot, routinely, for years. The committee was shown that evidence. The public got the adjective.
Calm at overnight is not the same as calm
The minutes say money markets functioned smoothly through recent bond market volatility, that cross-currency funding was stable, and that quarter-end and year-end are expected to be orderly. Then, almost in passing, they note that some members flagged emerging funding pressures.
Read that against the Bank’s own SONIA stakeholder group, which met the same day and whose minutes carry the numbers the money market committee’s do not: around £55 billion a day in overnight unsecured lending, a spread to Bank Rate hovering near 1.9 basis points, and money-market funds taking in roughly £15 billion since the start of the year while shifting more of it into the overnight tenor after changes in liquidity guidance and rising geopolitical tension.
Here is the mechanism nobody is spelling out. When cash funds shorten their maturities, the overnight market necessarily looks better — more volume, tighter spread, fewer month-end spikes. The term market they have vacated gets thinner at the same moment. The headline indicator of money market health improves precisely as the maturity structure underneath it becomes more fragile. Judging liquidity at the overnight point, in a quarter when funds have been migrating to it, is the weakest test available, not the strongest.
The lens the Bank says it may not have
The SONIA minutes also record that the Bank and the Treasury are reviewing the statutory powers used to collect sterling money market information, to ensure coverage holds up as market structure, regulation, infrastructure or booking locations change, and that the Bank may seek data on material activity in group entities.
Strip the officialese and that says: we are not confident our legal reach matches where this market now sits, particularly where trades are booked. Hold the two statements side by side. We can see enough to certify liquidity as ample. We are checking whether we can see enough. Both were minuted in the same week by committees chaired by the same institution.
The case against this argument
The fair reply is that the Money Markets Committee is a market intelligence forum, not a statistical release. Its value is practitioner judgement — the thing a data series cannot give you. Publishing usage figures in a minute risks identifying individual counterparties, and the Bank already reports the results of its operations through other channels. On the substance, funding genuinely did hold through a volatile stretch in gilts, which is not nothing.
All true, and none of it rescues the minute. Aggregate allotment figures identify nobody. If the numbers are already public elsewhere, restating what the committee was actually shown costs the Bank nothing and makes its judgement checkable. And practitioner judgement is the most procyclical instrument in the toolkit: funding markets are calm until they are not, and the people who trade them are structurally the last to put the turn in writing. A record made of adjectives cannot be marked afterwards. That is the point of marking it.
The Bank of England should publish, with each set of Money Markets Committee minutes, the facility usage figures the Chair presents: aggregate amounts allotted against each collateral set and the number of bidding counterparties. Aggregates expose no firm, and a repo-led framework that depends on destigmatised borrowing needs a public series, not a reassuring clause.
It should also publish the scope, timetable and completion date of the information-gathering powers review it has begun with the Treasury, and state plainly whether its current assessment of sterling funding conditions rests on data that captures activity booked in overseas group entities. The Treasury Committee, which has fresh Bank appointment papers in front of it this week, has an obvious opportunity to ask.
What would change this view
If the December Money Markets Committee minutes record the actual usage figures for the Bank's market-wide repo facilities that the Chair presented — amounts allotted and the number of bidding counterparties — and the Bank publishes the scope and timetable of the information-gathering powers review with a completion date, the transparency complaint collapses and I withdraw it.
It would also weaken the piece if the Bank publishes sterling money market data showing term funding volumes at one to three months holding steady through the year-end turn while money-market funds continue shifting into overnight. That would show the shortening of maturities is a preference, not a thinning of the term market, and the committee's calm assessment would be the right one.
Worked from
- Minutes of the Money Market Committee meeting – September 2026
Bank of England · 2026-10-13