Bank of England Lends Out $100Bln

LONDON -- The Bank of England moved to ease the effects of a credit crunch on Britain's banking system on Monday by offering to swap secure government bonds for riskier mortgage debt.

It is initially offering ?50 billion ($100 billion) worth of gilt-edged securities but the size of the scheme will depend on how much banks need to get lending going again -- and how much they're willing to stump up in costly collateral.

"There is no arbitrary limit on it," Bank of England Governor Mervyn King told reporters.

Although the move should help to give some much-needed to support to the banking system, economists cautioned the swap scheme alone would not be enough to revive a flagging economy.

"It will have a positive impact on the money market but it's unlikely that it will have any meaningful impact on unlocking mortgage markets," said Lena Komileva, market economist at Tullett Prebon.