HM Treasury are today announcing a joint scheme, working with the Bank of England, to address the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and/or electricity markets. This will provide resilience to both energy and financial markets, and the economy, and reduce the eventual cost for businesses and consumers.
Prices have recently been high and volatile. As a result, large amounts of collateral are required to enter into contracts firms use to effectively insure themselves from price fluctuations, or otherwise firms must accept large credit exposures to their counterparties.
The EMFS will enable short term financial support to wholesale firms.
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