The Money Markets Committee (MMC) convened on 25 September 2026 at the Bank of England, 20 Moorgate, London. The Chair welcomed members and confirmed the publication of the June 2026 meeting minutes. An update was provided on the usage of the Bank’s market-wide repo facilities, reinforcing the transition to a repo-led operating framework. The Chair also briefly discussed the Monetary Policy Committee’s (MPC) September decision on Quantitative Tightening (QT), including correspondence between the Governor and the Chancellor, and related announcements from the Bank and HM Treasury.
Members observed that money markets continued to function smoothly with stable funding conditions, even amidst increased bond market volatility. Liquidity was reported as ample, with minimal signs of stress. Cross-currency funding conditions remained stable despite geopolitical developments and broader market volatility, with quarter-end and year-end expected to be orderly. While some noted the potential for asset market volatility to impact funding through reduced risk appetite, the overall assessment was that money market functioning remained robust. Emerging funding pressures further out the euro curve were noted as Eurosystem liquidity declined. Developments in European Commercial Paper (ECP) markets were also discussed, with increased issuance activity and growing use of these funding channels.
The committee discussed the Financial Policy Committee’s proposed changes to the leverage ratio framework. While generally welcomed, members noted that leverage requirements are one of several constraints, making it difficult to predict a material increase in leverage or balance-sheet deployment in UK money markets in the near-term. Some suggested that greater releasability of constraints could support increased use of gilts and reverse repo within buffers. Members also noted increasing competition for retail and corporate deposits, which, while not yet materially affecting funding plans, could increase wholesale funding requirements and costs over time. Strong trading activity across gilt and international markets was reported from a market infrastructure perspective, with no material change in cleared repo conditions. The predictability of recent balance sheet announcements from the MPC and Bank was welcomed, supporting confidence in firms' ability to manage reserves and liquidity.
Bank staff provided an update on plans to extend RTGS and CHAPS settlement hours to support innovation, cross-border payments, and liquidity management. Feedback to the May 2026 Consultation Paper was broadly supportive, with respondents favouring an extension of existing operating days. Members supported the direction but highlighted practical considerations, including liquidity facilities outside current hours, managing liquidity and collateral over weekends and holidays, and implications for operational resilience. The challenges for smaller firms and corporates with more limited resources were also discussed. The implications of different approaches to value-date rollover during an extended settlement day were debated, balancing existing operational processes with alignment to contractual, accounting, and reconciliation frameworks. Bank staff will continue to engage with the industry to clarify the proposed approach.
For the forward agenda, the Committee will continue to receive updates on RTGS and CHAPS settlement hours and other sterling money market developments. The Chair invited suggestions for future agenda items. Separately, ongoing industry engagement on Euroclear UK & International's proposed MiniCREST contingency arrangement for cyber-attack scenarios was noted, with a return to the topic planned for the December meeting. The Sterling Money Markets Code Sub-Committee is preparing the next update to the Code, planned for 2027. The Committee was also informed of a report by the Association of Corporate Treasurers on promoting the UK as a location for corporate treasury centres.
