149/97
25 November 1997
CASH RATIO DEPOSITS: CONSULTATION DOCUMENT PUBLISHED
A consultation document on cash ratio deposits (CRDs), from which the Bank of England derives part of its income, was published today by the Treasury.
Banks currently place non-interest bearing CRDs at the Bank on a voluntary basis. As part of the reforms introduced by the Bank of England Bill, it is proposed to place the scheme on a statutory basis. This is designed to improve transparency and accountability.
The document explains the rationale for the scheme and its institutional coverage. It also sets out proposals on the definition of eligible liabilities - which forms the basis on which CRDs are calculated - and the distribution of CRDs.
The CRD scheme is proposed in Clause 6 and Schedule 2 of the Bank of England Bill. The consultation process is required under paragraph 10 of Schedule 2 of the Bill and will inform the final decisions on the scheme.
Comments are invited by 30 January 1998.
The Bank of England Bill is currently going through its Committee Stage in the House of Commons.
NOTES TO EDITORS
1. Media copies of the consultation document can be obtained from the Treasury Press Office on 0207 270 5185
2. Non-media copies can be obtained from the Public Enquiry Unit on 0207 270 4860/4558.