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Sterling Finance

Volume 975: debated on Monday 3 December 1979

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asked the Chancellor of the Exchequer whether the new Eurobond facilities, the drop lock floating rate note, has the approval of his Department as a means of providing local authorities with sterling finance.

The drop lock system is one of a variety of methods used by local authorities to borrow in sterling from the United Kingdom banking sector. As responsible independent bodies, authorities are free to decide upon the most appropriate method of borrowing from this source. Since such borrowing does not involve the issue of a negotiable instrument which can be traded in a market, nor the raising of money from outside the United Kingdom or in a foreign currency. Treasury approval is not required.