PRESS RELEASE: Government bailing out big business with public money behind the scenes through CCFF

London, 9 April 2020 – Research and campaign group Positive Money has today raised questions over the transparency of the Covid Corporate Financing Facility (CCFF), after the Bank of England revealed that big companies have drawn a further £3.6bn from the scheme this week.

Launched by the Bank of England and the Treasury in March, the CCFF allows large firms which are able to issue investment grade debt to access newly created money from the central bank in exchange for commercial paper (short term debt). Though this represents big businesses being bailed out with public money, the Bank of England is not disclosing who is receiving these funds.

In the first week of the CCFF (23 March – 1 April 2020), the Bank of England bought nearly £1.9bn of commercial paper from companies. The Bank bought up a further £3.626bn of commercial paper between 1-8 April, bringing the total bailout so far to more than £5.5bn

Individual firms can obtain up to £1bn from the CCFF, with there appearing to be no limit to the amount of money the Bank of England is willing to create to fund the scheme. EasyJet is the only company that has reported its usage of the CCFF, announcing that it had drawn £600m from it last week. However in doing so, EasyJet may have violated a confidentiality agreement with the Bank of England.

Fran Boait, executive director of Positive Money said:

“It almost seems as if the Treasury and the Bank of England have engineered a way to bailout big businesses with public money without the public ever having to know. The severity of the current crisis does not mean that bailouts should be concealed from the public eye.

“The lack of transparency is made even more worrying by the fact there are no social or environmental conditions attached to the CCFF. We already know that an airline has been given hundreds of millions of pounds through the scheme. This begs the question of who else could be getting a bailout behind the scenes.

“The Bank of England should at the very least scrap the confidentiality of its bailout scheme going forward. The public has a right to know where public money is going.”

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Notes

1. The Bank of England publishes the amount of commercial paper it has bought through the CCFF every Thursday at 3pm here: https://www.bankofengland.co.uk/markets/bank-of-england-market-operations-guide/results-and-usage-data

2. In its information for those seeking to participate in the CCFF, the Bank of England states that “The names of issuers and securities purchased or eligible will not be made public” and “We require companies that participate in the facility to sign a confidentiality agreement with the Bank.” https://www.bankofengland.co.uk/news/2020/march/the-covid-corporate-financing-facility

3. Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org

4. For any questions or for interviews with a spokesperson please contact simon.youel@positivemoney.org.uk or 07817765517