§ 12. Mr. Sheldonasked the Chancellor of the Exchequer what action he proposes to take to increase international liquidity.
§ Mr. CallaghanInternational liquidity can effectively be increased only by international agreement, which I shall do my best to foster. As my hon. Friend knows, international discussions are now in progress on the subject which will, I hope, enable some further advance to be made.
§ Mr. SheldonIs my right hon. Friend aware of the concern at the action of certain Governments in effecting a reduction in international liquidity? Is he further aware that, as long as this view persists, international agreement is somewhat unlikely? Will he consider encouraging the use of bilateral swop arrangements as a means of increasing international liquidity?
§ Mr. CallaghanBilateral swop arrangements have increased over the last year or 18 months, thus increasing liquidity, and there is no reason why they should not be extended. Certainly, we have to do our best to overcome any shortfall which there may be in liquidity arising from the great efforts which are being made by the United States and ourselves, under great pressure from the creditor countries, to put our balance of payments right.