Market Chatter: UK Lenders' Use of Bank of England's Riskiest Collateral Type Hits Highest Since 2020

08:03 AM EDT, 09/02/2026 (MT Newswires) -- Use of the Bank of England's riskiest type of collateral hit its highest level since March 2020, as British banks increasingly pledge higher-risk assets as collateral at the central bank, Reuters reported Wednesday, citing its own review of BoE filings. Lenders pledged 1.9 billion pounds sterling worth of so-called Level C collateral on Aug. 18, at the BoE's weekly auction for six-month funds, central bank data showed. The amount is also three times more than that of the prior week. Based on Reuters' calculations, the BoE's Level C collateral now totals 17.8 billion pounds from its Indexed Long-Term Repo facility, compared with 8.7 billion pounds a year before and under 1 billion pounds in mid-2024. The BoE did not immediately respond to MT Newswires' request for comment. (Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)