BoE ups corporate bond sales

The Bank of England increased operations in the corporate bond markets in an effort to improve market functioning in the fourth quarter of 2011, it revealed yesterday. The Bank buys corporate debt on the secondary markets in times of major sell offs, and sells its stock when necessary, all with the aim of providing pricing points. “Activity was increasingly driven by deteriorating liquidity conditions in corporate debt markets,” the report said, leading to higher volumes of sales and purchases compared with the previous quarter. Dealers had run down their stocks in the quarter, and when investor demand grew the Bank supplied buyers, selling £229m of the £1.1bn it held at the start of the period.