Document Type

Case Study

Case Series

Market Liquidity Programs

JEL Codes

G01, G28


In January 2009, following continued increases in commercial paper spreads, Her Majesty’s Treasury authorized the Bank of England to begin purchasing commercial paper under the Asset Purchase Facility (APF) in order to maintain UK-based corporations’ access to short-term financing. Under the Commercial Paper Facility (CPF), the Bank purchased commercial paper from both primary issuers and secondary holders at a rate that was favorable to issuers during the credit crunch but that would no longer be attractive once the markets recovered. By serving as a backstop, or market maker of last resort (MMLR), the Bank helped to restore liquidity to corporate credit markets. By February 2010, almost all issuers could find more favorable spreads in the market, and in November 2010, the Bank gave 12 months’ notice of the facility’s withdrawal. At peak utilization, the Bank purchased £2.4 billion of commercial paper in late April 2009.

Date Revised