§ 29. Sir FRANK NELSONasked the Chancellor of the Exchequer whether, under the new arrangements, the Bank of England will be permitted to hold commercial bills as a portion of its fiduciary reserve; if so, to what extent; and what conditions will govern the acceptance by the bank of mercantile bills as part of the fiduciary reserve?
Mr. SAMUELThe Bank of England will be required to hold in the issue department securities of an amount in value sufficient to cover the fiduciary note issue and to notify to the Treasury from time to time the actual securities held. The word securities is wide enough to cover commercial bills. It is not, however, intended to prescribe specific rules on this subject.
§ Sir F. NELSONMay the House understand from that reply that the securities held by the Bank of England 400 as part of the fiduciary reserve need not necessarily be Government securities, but may, in fact, be such securities as are chosen in the discretion of the bank, subject to periodical revision by the Treasury?
Mr. SAMUELThat, Sir, is too wide a subject for me to deal with by way of question and answer across the Floor of the House.