Reserve ratios and Special Deposits

Quarterly Bulletin 1971 Q3
Published on 01 September 1971

Following discussions by the Bank of England with the banking associations and with individual banks on the Bank's paper Competition and credit control which was published last May, agreement has been reached on new arrangements for the control of credit which will come into effect from 16th September. In future the banks will observe (day by day) a uniform minimum reserve ratio of 12½ per cent of "eligible liabilities" and will place such Special Deposits with the Bank (on a uniform basis, related to eligible liabilities) as may be called for from time to time. This gives effect to the basic principles of the arrangements outlined in Competition and credit control, but in the course of the discussions a number of clarifications and modifications of detail to the original proposals have been agreed. The main features of the scheme are described in the following sections.

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