- BOE purchases to be unwound in an orderly manner once risks ebb
I'll just repeat what I said in the previous post:
Well, essentially one can think of the BOE acting as one of the core functions of the central bank i.e. lender of last resort (at least in some sense). The whole point here is that they needed to address solvency issues in the financial system and prevent contagion risk - which is why such drastic action was needed. The question now is, will that be enough to allow the necessary parties to settle and diversify their risk exposure in case another rout in gilts were to take place moving forward?
