The plan works in a fairly simple manner: In the UK's case, the BofE is lending short-term government bills to banks, which use the securities as collateral to borrow money from the central bank at a rock-bottom rate — about 0.25 percent — and then make loans.
Banks can borrow up to 5 percent of the value of their existing loan books, and the loans from the BofE are four years in duration.
The program is similar to something the Fed tried, with considerable success, during the financial crisis that exploded in 2008....Read it at CNBC
The Fed's program was called the Term Asset-Backed Securities Loan Facility and allowed primary dealers to borrow Treasury bills from the Fed in exchange for depositing collateral.
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