§ Lord Monkswellasked Her Majesty's Government:
Whether Barings Bank was on the list of banks which local authorities were advised to use for the secure deposit of public funds.
§ The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley):No such list exists. Baring Brothers and Co Ltd was however included in the list issued by the Bank of England under Section 17 of the Banking Act 1987 (which is generally known as the "Banking Act List") and is circulated to local authorities from time to time. The list includes institutions authorised under the Act and certain institutions authorised by home state regulators elsewhere in the European Economic Area to take deposits in the United Kingdom. It does not say anything about the creditworthiness of those institutions and is not a substitute for proper credit assessment by local authorities. The preface to the list issued under the Banking Act states that the inclusion of an institution on the list does not mean that the Bank of England in any way guarantees its obligations.
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§ Lord Monkswellasked Her Majesty's Government:
Whether they will reimburse to local authorities any losses of public funds that they have incurred as a result of Barings Bank going into administration.
§ Lord Henley:No. Local authorities which had deposits with Baring Brothers & Co Ltd will be reassured by the announcement made by the Chairman of ING Group (which is negotiating to take the business of the Barings group) on 9 March that "all deposits are safe."