Published by Global Banking & Finance Review®
Posted on January 29, 2025
2 min readLast updated: January 27, 2026
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UK banks request £400-500 billion in reserves from the Bank of England as it reduces its balance sheet, according to Governor Andrew Bailey.
LONDON (Reuters) - Banks in Britain say they will want to hold 400 billion to 500 billion pounds ($496-$620 billion) of reserves with BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BOE-BANKS-e57d1808-2900-42bd-832f-d8f2baa8f262>the Bank of England as it reduces the size of its balance sheet, Governor Andrew Bailey said on Wednesday.
The BoE is unwinding a vast pile of reserves - cash it created to buy government bonds in successive rounds of quantitative easing - shifting it from an environment of excess reserves to a level that may fall below the equilibrium that reflects market appetite.
"We talk to the banks a lot about it, they give us numbers which are in the range of 400 billion to 500 billion pounds - but we don't precisely know and it can change over time," Bailey told lawmakers from parliament's Treasury Committee.
Bailey said it was possible that reserves could fall to that level later this year, in line with earlier estimates for the timing.
In a speech last May, Bailey said he expected what the BoE calls the 'preferred minimum range of reserves' to be somewhere between 345 billion pounds and 490 billion pounds.
($1 = 0.8061 pounds)
(Reporting by David Milliken and Suban Abdulla, writing by BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BOE-fe2470b0-c07c-401d-9186-c09f24d16424>Andy Bruce; Editing by William Schomberg)
UK banks are seeking to hold reserves in the range of 400 billion to 500 billion pounds.
The Bank of England is unwinding a large amount of reserves created through quantitative easing, moving towards a more balanced reserve level.
Bailey mentioned that it is possible for reserves to fall to the desired level later this year, aligning with previous estimates.
Bailey indicated that the preferred minimum range of reserves is expected to be between 345 billion pounds and 490 billion pounds.
The article was reported by David Milliken and Suban Abdulla, with writing by Andy Bruce and editing by William Schomberg.
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