§ Mr. Leeasked the Secretary of State for Foreign and Commonwealth Affairs (1) if he will make representations to the European Economic Commission regarding the disbursement of loans by foreign banks situated in Brussels to competitors of British companies on terms more favourable than those available to British companies trading in the Common Mar- 108W ket, so as to reduce the risk of unfair competition contrary to Article 92 of the Treaty of Rome; and if he will make a statement:
(2) if he will make representations to the European Economic Commission regarding the disbursement of loans by foreign subsidiaries of British banks situated in Brussels to competitors of British companies on terms more favourable than those available to British companies trading in the Common Market, so as to reduce the risk of unfair competition contrary to Article 92 of the Treaty of Rome: and if he will make a statement.
§ Mr. Denzil DaviesI have been asked to reply.
The rate of interest charged on loans is a matter for the bank concerned, and will generally reflect the cost to the bank of the funds involved and the credit standing of particular borrowers. Among other things, the cost of the funds will differ according to the currency in which the loan is made. These considerations apply regardless of the country of ownership of an individual bank. Article 92 of the Treaty of Rome refers to the effects on competition of State assistance to companies. If my hon. Friend has in mind any specific example where the requirements of the article may not have been met, I shall be pleased to hear from him.