Please sir, may we have some more?

From City AM:

The Bank of England (BoE) made an unprecedented move yesterday as it allowed certain non-bank organisations to access its account facilities – expanding its so called lender-of-last-resort access.

For at least a century, only commercial banks and building societies had the privilege of keeping accounts with the BoE...  From now on, designated investment firms and central counterparties (CCPs) will be allowed to keep accounts at the bank...

Go on then, what's a CCP? (the old Soviet Union in cyrillic with a letter missing?)

CCPs manage risk by stepping into the middle of a financial transaction between two parties. Instead of dealing with each other, both parties deal with the CCP...

CCPs have been around for a long time but only started playing a larger role in financial markets after regulators made their use mandatory for certain activities.

Good stuff. Get private players using their own money to backstop/insure/underwrite the banking system, keep the taxpayer and government out of it.

Recognising this, the BoE has allowed them access to its account facilities to ensure it can always be rescued should another crisis hit financial markets.

A primary example of a CCP in the UK is LCH.clearnet which “clears” half of the world’s interest rate swap market ­– a transaction where a fixed rate is swapped for a variable one.

Jolly good.

So the UK government is now underwriting the underwriters? That was the whole point of making the underwriting mandatory so that the UK government wouldn't have to underwrite them.

And we're underwriting interest rate swaps even though most people don't even know what they are, and most swaps are purely speculative (gambling on interest rate and currency movements).