§ Mr. MacGregor
Yes. After extensive consultations with United Kingdom exporters and financial institutions a group of officials from the Treasury, DTI, ECGD and the Bank of England concluded that there was currently little support for the development of a private sector export bank and that such an institution seemed likely to require Government assistance and support in its early stages, thus involving a privileged position which would have been difficult to justify. Ministers have endorsed these conclusions.
The discussions served to demonstrate a widespread appreciation of the potential advantages to both exporters and the Exchequer from encouraging greater use of the capital markets for export finance. To encourage the use of the bond market for export finance the Government have already announced, at column 242 on 21 December 1983, that ECGD would be permitted to guarantee bonds denominated in sterling or foreign currency where this enabled exporters to offer competitive financing packages without subsidy. We are now prepared to extend this to bonds and other capital market instruments where ECGD provides interest rate support, subject still to Treasury and Bank of England consent in individual cases. Discussions with the banks on the use of this mechanism have already begun and ECGD will be seeking to identify appropriate cases in a systematic fashion.
In parallel with this, officials will be discussing with the banks, as part of the periodic review of the structure and level of remuneration available to them under ECGD's fixed rate export finance schemes, modifications to reflect developments in financial markets and new financial instruments. It remains the Government's aim to ensure that export finance is readily available to exporters in the most suitable and cost-effective form so as to enable them to compete effectively in overseas markets.