Minutes
Item 1 – Welcome
The Chair thanked members for attending and confirmed that the Minutes of the Money Markets Committee (MMC) March 2026 meeting had been published on the Bank’s website.footnote [1]
Due to extreme weather condition warnings, the June 2026 MMC meeting was held virtually. The Chair thanked members for their flexibility and understanding.
Item 2 – Discussion on market conditions
The discussion opened with members providing perspectives on recent developments in sterling secured and unsecured money markets. Overall, money markets were described as functioning well, with resilience in funding conditions supported by strong cash availability, including from central bank facilities and, to a lesser extent, corporates. This had contributed to reduced volatility and relatively flat funding curves.
In the gilt repo market, conditions were generally stable, although some variability in rates had been observed around May month-end and subsequently throughout June. This was partly attributed to typical reporting period dynamics, alongside some frictions that may have modestly affected liquidity recycling. Members also noted that there were some indications of reduced hedge fund leverage globally following recent geopolitical developments, with differing drivers noted across jurisdictions, though this may have partially reversed more recently.
Unsecured money markets continued to function smoothly, with access to funding remaining available across tenors, although spreads at longer maturities remained modestly wider than before the Middle East conflict. Some members noted that equity financing levels have continued to increase, though emphasised the degree of segmentation in the allocation of balance sheet across asset classes.
In the context of Money Market Funds (MMFs), members reported positive reception to recent regulatory guidance and noted continued inflows into sterling funds. From a corporate perspective, members reported no material disruption to funding conditions, with markets remaining accessible across maturities.
Item 3 – Update on CREST Transformation Project
Representatives from Euroclear provided an update on the CREST Transformation Project. Euroclear explained the proposed changes aim to modernise market infrastructure through the adoption of standardised processes and enhanced collateral optimisation. The programme includes plans to transition from the current Delivery-by-Value (DBV) product and tri-party model alternatives.
Members noted that DBV continues to play an important role in sterling repo and collateral management, including in central bank operations. Some participants raised questions regarding the potential implications for settlement processes and operational resilience during the transition.
It was noted that the transformation programme will be implemented over several years, with continued engagement between Euroclear and market participants seen as important in managing the transition.
Item 4 – Discussion on Enhancing the resilience of the gilt repo market feedback statement
Bank staff provided an overview of the feedback statement on potential measures to enhance the resilience of the gilt repo market.footnote [2]
Members expressed broad support for the Bank’s assessment and ongoing work on gilt repo market resilience, alongside a preference for targeted and proportionate measures. Greater central clearing was discussed, where members noted the potential benefits alongside practical considerations associated with an expansion of central clearing, such as costs and market participants’ access to clearing services.
There was broad support for initiatives aimed at encouraging voluntary increase in central clearing by market participants, including innovations to clearing models and the potential introduction of cross-margining arrangements. Both members and Bank staff also noted that any change to market structure would take time, to ensure that all market participants have sufficient time to input into the design of, and prepare for, any proposed changes.
Views on minimum haircuts were less critical than in the feedback statement. Some members highlighted that minimum haircuts would do little to change behaviour in stress and would be unlikely to have an impact on market liquidity. This may be due to the emphasis made by the Bank that any minimum haircuts policy would be risk-sensitive and could be applied at the portfolio-level.
Bank staff emphasised that further work would be undertaken over a multi-year horizon, with continued engagement planned to further inform the design and assessment of potential market structure reforms.
Item 5 – Forward agenda and horizon scanning
The Chair noted the Bank’s Consultation Paperfootnote [3] on extending RTGS and CHAPS settlement hours towards near 24x7 settlement, highlighting its relevance for money markets, and encouraged members to engage accordingly.