Operational Standing Facilities

Bank of England.

(OSF).

The Bank of England's Operational Standing Facilities (OSF) are part of its Sterling Monetary Framework (SMF).

The OSFs are the:

• Operational Standing Lending Facility.
• Operational Standing Deposit Facility.

The facilities are overnight and on demand, at predetermined fixed interest rates.

As part of the SMF, the OSFs' purposes are to:

• Provide a mechanism to bring about a close alignment of money market rates and the Official Bank Rate.
• Provide a means for banks and other SMF participants to manage any temporary liquidity shortages arising from technical problems in their internal payments and settlement systems, or in the market-wide payments and settlements infrastructure.

Such temporary liquidity shortages are sometimes known as 'frictional' payment shocks.

See also

• Bank of England
• Financial Policy Committee
• Inflation
• Infrastructure
• Liquidity
• Liquidity insurance
• Monetary policy
• Monetary Policy Committee
• Money market
• Official Bank Rate
• Operations
• Sterling Monetary Framework