asked the Chancellor of the Exchequer if he will make a statement on the respective roles of (a) his Department and (b) the Bank of England in the establishment of an inquiry into the management of Morgan Grenfell and, in particular, on the resignations of the chief executive and the head of the corporate finance department: and under what powers the Bank of England has purported to act in this matter.

As my right hon. Friend the Chancellor of the Exchequer explained to the House on 20 January, at column 781, Morgan Grenfell, as a recognised bank, is subject to the supervisory authority of the Bank of England and to the terms of the Banking Act 1979. I have nothing further to add concerning the bank's role with respect to Morgan Grenfell. As my right hon. Friend also told the House, the Governor is keeping him informed of developments.