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This paper provides a review of the liquidity provision framework and recent developments in the United Kingdom. The Bank of England’s (BoE’s) Sterling Monetary Framework is the mechanism used in the United Kingdom to direct liquidity provision. The BoE’s relatively wide-ranging and accessible liquidity insurance framework raises three key questions and four other issues relevant to financial stability. The quantification of implications of the liquidity framework for the BoE balance sheet is still a work in progress. Safeguards are generally sufficient, although the BoE should ensure that lower level of supervisory scrutiny directed at small- and medium-sized enterprises does not adversely impact its horizon-scanning for firms at risk of requiring liquidity support.

Banks and Banking --- Finance: General --- Financial Risk Management --- Insurance --- Portfolio Choice --- Investment Decisions --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Insurance Companies --- Actuarial Studies --- Financial Institutions and Services: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Finance --- Banking --- Insurance & actuarial studies --- Economic & financial crises & disasters --- Financial services law & regulation --- Liquidity --- Lender of last resort --- Foreign currency liquidity --- Asset and liability management --- Financial institutions --- Financial crises --- Liquidity risk --- Financial regulation and supervision --- Economics --- Banks and banking --- Banks and banking, Central --- Financial risk management --- United Kingdom