LONDON | Wed Dec 19, 2012 6:39am EST
LONDON Dec 19 (Reuters) - The Bank of England said it allotted none of the 5 billion pounds ($8.12 billion) of six-month funds available to banks at its extended collateral term repo (ECTR) on Wednesday.
Demand for the funds made available on a monthly basis has been dwindling since the BoE announced in June that it was activating the scheme, suggesting that banks had enough funding from other sources.
The scheme was set up last December and was originally intended to offer one-month funds, as part of efforts to ease banks' funding strains and to kick-start Britain's faltering recovery.
It allows banks to borrow central bank funds in return for lower-quality collateral than they would usually be able to use, including residential mortgage-backed securities, securitised credit card debt, student and consumer loans and some types of asset-backed commercial paper.
The Bank of England has pinned high hopes on a second scheme, called Funding for Lending, which provides cheap funding to banks if they maintain or extend lending to businesses and consumers.
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