British banks increasingly pledge higher-risk assets for Bank of England cash

British banks are increasingly using higher-risk assets, such as loans tied to high-interest store cards and vehicle leases, as collateral in the Bank of England's weekly auction for six-month funds. On August 18, banks pledged £1.9 billion ($2.6 billion) worth of the BoE's highest-risk collateral, marking the largest amount since March 2020 and three times the volume from the previous week. This increased utilization of the Indexed Long-Term Repo (ILTR) facility is an intended outcome of the Bank of England's 2022 decision to reverse its quantitative easing program.