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Banks: Finance

Volume 487: debated on Thursday 29 January 2009

To ask the Chancellor of the Exchequer pursuant to the answer of 22 January 2009, Official Report, column 1630W, on banks: Government assistance, what the discount rates and maturities are of the Treasury Bills issued in accordance with paragraph 6.9 of the Debt and Reserves Management Report 2008-09 in order to make finance available to the Bank of England to purchase corporate assets from banks. (252892)

As announced by the Debt Management Office (DMO) in the “DMO financing remit: impact of the financial intervention package: 19 January 2009”, the financing to support the asset purchase facility will initially be raised by the DMO through a combination of Treasury bill sales and cash management operations.

Gradually, the cash management operations will be replaced by funding raised through Treasury bill issuance. The Treasury bills that will be issued to fund the asset purchase facility will be issued consistent with the Debt Management Office’s cash management objective as set out in paragraph 6.5 of the “Debt and reserves management report” for 2008-09.