UK banks opt for non-sterling funding, but capital only hope for supply
US dollar investors saw increased supply from UK banks in Q2, but the supply outlook is still bleak across currencies. Overall wholesale funding supply has reduced significantly, leaving capital the only hope for increased supply in Q3, according to the Bank of England’s quarterly liabilities report.
Banks shifted towards US dollar funding in Q2, while euro funding fell. A fall in the cost of swapping foreign currencies back into sterling drove non-sterling issuance, said banks, although they added that part of that increase was also down to changes in the currency mix of assets.
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