Why did the Bank of England deny access to further funds?
After making three separate payments totalling £4.9bn under the Special Liquidity Scheme (SLS), the Bank of England declined Bradford & Bingley’s fourth application for emergency funds. They made their decision because Fitch ratings agency had placed the covered bonds that Bradford & Bingley used as part of its collateral for the SLS on negative watch and warned that it would downgrade the bonds if they weren’t restructured. Bradford & Bingley advised the Bank of England that restructuring the bonds would be difficult to achieve quickly.
