LONDON (Reuters) – Britain’s debt agency chief said on Tuesday central banks had played a crucial role in stabilising markets panicked by the coronavirus crisis and their assurances had given investors and primary dealers the confidence to participate in bond markets.
“What the central banks have done, and the Bank of England in particular, which they should get credit for, is that at key moments over the last eight months they have stabilised market conditions and supported good market functioning,” Robert Stheeman, Chief Executive of Britain’s debt management office said during an online panel at the Association for Financial Markets in Europe’s government bond conference.
“That was clearly absolutely essential to us because we use the markets to fund the government but it was also essential for the wider market.”
Central banks in Europe, the United States and Asia have unleashed aggressive stimulus this year to shore up economies hit by the COVID-19 crisis and to stabilise financial markets sent reeling in March when the pandemic spread.
“Without the credibility and assurance that the markets would function well, our primary dealers are going to be reluctant to participate,” Stheeman added.
(Reporting by Dhara Ranasinghe; Editing by Tommy Wilkes)
