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UK banks forced to support financial counterparties

Posted on Friday, November 2, 2007 at 02:10PM by Registered CommenterSimon Ward | CommentsPost a Comment

Third-quarter figures on bank lending by sector released by the Bank of England today suggest banks provided massive support to off-balance sheet vehicles, hedge funds and other financial intermediaries during the August / September market dislocation. The chart aggregates the flow of new sterling lending to three industries: “other financial intermediaries”, “fund management activities” and “other auxiliary activities”. The third-quarter total of £41 billion is a record and amounts to 19% of the outstanding stock of loans to these industries – equivalent to a 99% annualised growth rate!

UKBankLendingToIntermediaries.jpg

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