Cascade Commentary

December 2020

At the end of September 2020, Lloyds Bank was reported to have drawn £13.6bn from the Bank of England’s Term Funding Scheme, followed by Barclays and Nationwide Building Society who have drawn £6.58bn and £6.2bn respectively. When interest rates are low, it is difficult for some providers to reduce deposit rates much further and this can limit the provider’s ability to cut lending rates. To mitigate these pressures, the Term Funding Scheme providers a cost-effective source of funding to support additional lending, with additional incentives for support of lending to SMEs.