Thread: 'Base interest rate' and capitalism
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Unread 15 May 2007, 10:11   #8
Dante Hicks
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Re: 'Base interest rate' and capitalism
Aside from currency issues, the Bank of England is the lender of last resort. The reason why you don't get It's a Wonderful Life type scenes all the time (well, not in the UK/US anymore) because even if Barclays "ran out of money" then they could simply borrow from the Bank of England. (That's making a bit overly simplistic, but you get the idea).

The "base rate" also affects the yield of govt bonds and stuff, which aren't necessarily as sexy as the stuff which dominates the financial pages, but still represent huge sums of cash.
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