From time to time, all banks in the United Kingdom which transact foreign currency business provide the Bank of England with returns of their assets and liabilities in nonsterling currencies according to maturity. Such returns have previously been called for as at 28th April 1968, and at the end of July in 1969 and 1970. This article analyses the latest figures, relating to end-February 1971, which are shown in the table on pages 222-3.
In calling for another enquiry after an interval of only seven months, the Bank were influenced by the further large accruals of funds to the London market resulting from the repayment by banks in the United States of loans they had received from their U.K. branches. These funds, together with a growing volume of deposits taken from other banks abroad, were increasingly being channelled to companies, both in the United Kingdom and overseas. The Bank wished to be assured that the London market continued to match the maturity of its foreign currency liabilities and assets reasonably closely, and to maintain an ample degree of liquidity.