§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer whether he will publish in theOfficial Report the losses incurred by the Bank of England since 1985 supporting (a) financial institutions and (b) manufacturing industry, the names of the borrowers and the date and path along which the loans were made and the date and form in which losses were disclosed in each case in the Bank's balance sheet; what reason of public policy led to the making of the loans and who is carrying the losses; and what assessment he has made of compliance with the Companies Act and rules of the regulatory agencies.
§ Mr. NelsonThe bank made provisions of £25 million in 1991–92 and £90 million in 1992–93, in respect of indemnities given to lenders to a number of small authorised banks. The total provision was reduced by £10 million in the year to February 1994. The background to these movements in provisions was set out in the bank's accounts for 1992–93 and 1993–94. As explained there, this support was designed to avert the possibility of widespread difficulties in the banking system and in the economy, and was successful in containing the potential problem.
In the year to February 1985, the bank made a provision of £34 million against possible losses on indemnities given in respect of the value of the loan book of Johnson Matthey Bankers, now Minories Finance Ltd. Subsequent recoveries by MFL have fully offset this provision.
The bank is not subject to the Companies Acts or to the disclosure rules of regulatory agencies, but its published accounts present fairly the state of affairs of the banking department in accordance with the Companies Act and applicable accounting standards in so far as they are appropriate to a central bank.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what assessment he has made of the effects of publishing the minutes of his monthly meetings with the Bank of England.
§ Mr. NelsonThe Chancellor said in the Mansion House speech, and repeated at the Treasury and Civil Service Committee hearing, that publishing minutes was an important decision and one which made decision taking about interest rates in this country one of the most transparent in the world. A more informal debate about economic policy can take place because of the openness that surrounds discussions on monetary policy. The Chancellor said in the Mansion House speech
I have given today's politicians and tomorrow's politicians no choice but to pursue the path of low inflation to which we are so clearly committed".The latest minutes of the 8 June meeting were published on 20 July.