The pictorial Funding for Lending | FT Alphaville

The pictorial Funding for Lending

There’s a more respectable explanation from the Bank of England here, calling the scheme a “collateral swap,” which is just what it is.

Just a slight risk of brand confusion there, BoE…

This part incidentally reads more like ‘Funding for Nicer Deleveraging’:

Some banks need to reduce certain parts of their lending activities, consistent with the continued adjustment of their business models in the wake of the financial crisis. While that adjustment should continue, the fees charged in the Scheme encourage those banks that are planning to restrict their lending to households and companies to cut back by less than would otherwise have been the case.