British banks are increasingly pledging higher-risk assets such as loans linked to high-interest store cards and vehicle leases as collateral at ​the Bank of England, a Reuters review of BoE filings shows.

This explanation comes from Reuters, a team who have been covering the use of private credit by insurance companies  to secure pensions with Bulk Annuities.

Ian Fraser explains how private credit finds its way into the Bank of England and is exchanged for cash that pays our mortgages.

This time , the product that’s being supported by overseas private credit is not the pension purchasing annuity but the cash that lets us buy houses with a mortgage.

Reuters analysis of the BoE’s Level C collateral list showed that the British central bank accepts a range of products in categories that the ECB has disallowed,under its tighter rules, on acceptable loan security, including several debt products that package up and sell the future payments on homeowners’ mortgages.

We’ve been here before

The securitisation of mortgage-backed debt and other loans was a major contributor to the 2008 financial crisis as it encouraged risk-taking by lenders who were able to quickly sell the debt on.