§ Mr. Austin Mitchell
To ask the Chancellor of the Exchequer what fees or commissions are payable by the United Kingdom to the Deutsche Bundesbank when it buys the £ sterling at British request; and what arrangements exist for buying back the £ sterling.
§ Mr. Maples
[holding answer 2 December 1991]: As members of the exchange rate mechanism, the United Kingdom and Germany have access to the very short-term facility—VSTF—of the European monetary system, under which credit is automatically available, in unlimited amounts to finance obligatory intervention against any other currency in the system. The VSTF can also be made available for non-obligatory intervention, but not automatically. VSTF credits have to be repaid within a period of about three months. Operations under the VSTF attract interest, but no commission or fees are paid. The resulting credits and debits are held in accounts with the European Monetary Co-operation Fund. The interest rates are a weighted average of the representative domestic money market rates in those countries whose currencies make up the ecu basket.