The Bank's accounts

The Ban k is obliged (under the Bank Charter Act The current cost accounts, shown on page 28 show 1844) to kee p separate its responsibilities in respect a profit before tax and dividend of £63·2 million, of the issue of bank notes from other banking some £7·1 million less than in the historical cost business. Thus, the Bank's annual accounts are accounts. presented in two sections-'Banking Department' and ' Issue Department'.

The Banking Department accounts for the year ended The Issue Department accounts are shown on page 30. 28 February 1983 show an operating profit of In accordance with the Currency and Bank Notes £70-3 million, compared with £53·2 million in Act 1928, the assets of the Iss ue Department 1981 /82. After a payment in lieu of dividend of comprise securities of an amount in value sufficient £23-0 million (compared with £18·0 million) and a to cover the fiduciary note issue. The profits of the lax charge of £22·6 million, the profit transferred note issue are payable to the Treasury and amollnted to reserves amounts to £24 · 7 million, compared with to £1,129'9 million compared with £1,347 3 million £19·2 million laS I year. in 1981/82.

15 Report of the Auditors

To the Governor and Company a/the Bank of England

We have audited the accounts of the Banking ended 28 February 1983 and its balances at that Department on pages 17 to 29, and the statements of date. account of the Issue Department on page 30, In accordance with approved Auditing Standards. 3 The abridged supplementary current cost accounts of the Banking Department on pages 28 In our opinion and 29 have been properly prepared in accordance I The accounts on pages 17 to 27 give a true and with the policies and methods described in fair view of the state of affairs of the Banking notes 1 to 3, to give the information required by Department at 28 February 1983 and of the Statement of Standard Accounting Practice profit and source and application of funds for the No. 16. year then ended. DELOITIE HASKINS & SELLS

2 The statements of account of the Issue Chartered Accountants

Department present fairl y the outcome of the LO/ufoll transactions of the Department for the year 30 }ulle 1983

16 Banking Department

Profit and loss account for the year ended 28 February 1983

1982 1983

£()()()

53,169 Operating profit (Note 2) 70,309

Payment to the Treasury under Section 1(4) of the 18,000 Bank of England Act 1946 (Note 5) 23,()()()

35,169 Profit before taxation 47,309

15,964 Taxation (NOle 6) 22,596

19,m5 Profit transferred to reserves (Nole 8) 24,713

The notes on pages 20 to 26 form part or the$e ftC«lunts.

17 Banking Department

Balance sheet: 28 February 1983

1982 1983 £000 £000 £000

14.553 Capital 14,553

359,257 Reserves (Nole 8) 383.970

373,8/0 398.523

Current Liabilities

226,937 Public deposits 4 \,,>/(, Y) 644,774

612,234 Bankers' deposits (:Yore ID) 694,898

1,416,979 Other accounts 1,78 1,231

18,000 Payable to the Treasury (Note 5) 23,000

2,274,150 3, 143,903

2,647,960 3,542,426

The notes on pages 20 10 26 form part of 1'- accounts.

IS Banking Department

Balance sheet: 28 February 1983

1982 1983 £(J(HJ £()()() £()()() Uquid assets ]O ,4J7 Notes and coin 17.227

210,167 Cheques in course of collection (Note I/) 229,634

719.213 Treasury anti other bills (Note 12) 1,339,883

950.417 1,586,744

Investments (Note 13)

260,297 Securities of, or guaranteed by, the British Government 315,791

21,531 Other securities 22,537

281,828 338,328

1,175,68/ Adva nces and other accounts, less provisions (Note 7) 1,372,718

Subsidiary companies (Note 14)

16.983 Investments 16,983

8,369 Amounts owing 8,326

25,352 25,309

214,682 Premises and equipment (Note 15) 219,327

2,647,960 3,542,426

RICHAROSON OF DUNTlllllOURNE Go)'emur

C W M cM AHON DtPfll), Go.'emur

NELSON OF STAffORD Dirtclor

R 0 GALPlN Chitf of Corporate Services

19 Notes on the Banking Department accounts

I Accounting policies a Form of pr~nta tion of accounts Although the Bank's constitut ion is not governed by the Companies Acts 1948 to 198 1, the accounts have been prepared so as to comply with the req uirements of those Acts and the Statements of Standard Accounting Practice issued by the accountancy bodies in so far as they are appropriate. The accounts have been prepared on the historical cost basis of accounting, modified to include th e revaluation of certain fixed assets and in accordance with Section 149A of, and Sc hedule 8A to, the Companies Act 1948.

" Treasury and oth('r bills Treasury and ot her bilts are stated at cost plus interest accrued. c Im('stmcnts Securities of, or guaranteed by, the British Government, and Other s«urities are stated in the balance sheet at cost less provision for losses; li sted securities are va lued at mid -market prices, unlis ted al Directors" valuation. Profits and losses on realisation are taken to profit and loss account in the year in which they arise. d Premi~ and equipm('nl Freehold and leasehold premises are stated at a professiona l va luation on an open­ market va lue for ex isting use basis as at 28 February 1982 plus the cost of subsequent additit)ns and less accumulated depreciation. No account is taken of the liabil ity to taxation which could arise if the premises were disposed of at their revalued amounts. Eq uipment is stated at cost less accum ulated depreciation. Fully depreciated items have been written out of the accounts. Depreciation, on a straight line basis, is charged as follows: Freehold premises over the estimated future life Leasehold premises over the period of lease or estimated future life Computers over five years Other equipment over periods ranging from four to twenty years

e Bad and doubtful debts Appropriate provision is made for bad and doubtful debts.

f Foreign cu rrency translation Asse ts and corresponding liabil ities in foreign currencies are translated into sterling at the exchange rates ruling at 28 February.

g Commitments on behalf of the Tr('asury Commitment s in foreign currencies and gold, or on a gold basis, undertaken in the name of the Bank for account of the Treasury, principally in the course of operating the Exchange Eq ual isalion Account, are not incl uded in lhese accounts as the Bank is concerned in such transactions only as agent.

h Deftrred tax Deferred tax is provided at current rates of tax in respect of all material timing differences except where it is expected that the relevanl timing difference will not reverse in the foreseeable fulure.

20 j Retirement benefits The profit of the year bears the cost of providing pensions in respect of current service. Any unfunded liability in respect of past service disclosed by an actuarial valuation is met either by a special contributiOn to the pension fund or by an increase in the current contribution rate. The Bank of England Pension Fund is reviewed annuall y and full actuarial valuations are obtained every three years. The ne}!: 1 full actuarial valuation will take place as at 29 February 1984.

2 Operating profit The operating profit is arrived at aFter taking account o f the following:

1981 1983 £ thousands £ thousands Income Interest: 96,822 Treasury and other bill s 110,808 Securities of, or guaranteed by, the British 31,806 Go~ernment 41,885 16,701 Ad~ ances 14.688 Interest and Dividends: 1,191 Listed sec urities 1,368 1,596 Unlisted sc<:uri ti es 8,067 37,897 Charges for services to the Government 39,137 1,839 Ren ts 2,t62 Surplus over written down value on 1,856 disposal of fixed assets '" Cbargt$ 46,397 Interest paid to depositol'$ 67,849

3 Directors' and employees' emoluments The aggregate emoluments of the Governors and Directors for the year ended 28 February were: /981 1983 £11,500 F= £11,500 Other emoluments, including remuneration of Go~ernors and E~C(:u ti~e Directors and co ntributions to Directors' £398,756 Pension Scheme £412.966 The emoluments of the Governor, excluding pens ion contributions, were £51,980 (1982 £51,980), The emoluments, excluding pension contributions, of the highest paid director were £S6,584 (1982 £54,176). Remuneration amounting to £26,965 (1982 £21,944) was waived by the Governor. The following table shows, for the year ended 28 February, the number of other Directors, andofemployees of the Bank receiving remuneration in excess of £30,000, within the bands stated (excl uding pension contributions). /982 1983 Direcfors Employns Directors Employees 12 £0- £5,000 12 31 £3O,OO t- £35.000 J9 38 £3S,

The a~gate remuneration of the employees of the Bank was £57'S million (1982 £55 ·6million).

21 4 Provision for losses A net amount of £1,398,000 has been transferred to the provision for losses in respect of British Government and Other securities, advances and guarantees.

5 Payment to the Treasury /982 1983 £ thousonds £ thousands 5,500 Payable 5 Apri l 1983 7,500 12,500 Pa yable 5 October 1983 15,500

18,000 23,000

6 Taxation The charge for taxation comprises: 1982 1983 £ rhollsollds £ thousands UK corporation tax at 52% based on the 19,301 profits of the yea r 11,290 (3,638) Deferred tax 5,936 301 In come tax on franked investment income 340 Prior year adjustment (970)

15,964 22,596

T he charge for taxation reflects the benefit of accelerated capital allowances amounting to £4,594,000, No adjustments for deferred taxation in respe:;t of the rcsultant timing differences have been made, as they are not expected to reverse within the foreseeable future.

7 Deferred taxation Included under Advances and other accounts is a deferred tax balance, relating 10 short-term timing differences, of £I3,400,OCKl ( 1982 £ 19,300,000). T he potential liability for deferred taxation not provided in the accounts is : /982 1983 £ Iholls(lIIds £ thousands 10,413 Accelerated depreciation allowances 12,813 Capit al gains on unrealised n ,m revaluation surpluses less deficits 19,300

32,423 32,113

8 Reserves £ thousands Gene ral Revaluation reserve surplus Total Balance at I March 1982 198,074 161,183 359,257 Profit of the year retained 24,71) 24,713

Balance at 28 Februa ry 1983 222,787 t61,183 383,970

9 Public deposits Public deposits are the balances on government accounts, including Exchequer, National Loans Fund, National Debt Commissioners and dividend accounts,

22 10 Bankers' deposits Bankers' deposits include £436,070,000 (1982 £343,473,000) in respect of cash ratio deposits placed by recognised banks and licensed deposit-taking institutions.

11 Cheques in course of co llection T hese uncleared effects are mostly in respect of Public deposits.

]2 Treasury and other bills 1982 1983 £ Ihou~onds £ thousands 353.476 Elitish Government Treasury bilts 82,]25 365,737 Other bilts 1,257,758

719,213 t.339,883

]3 Investments 1982 1983 £ thousands £ thousands Book Markn Book Markct !'Glue vallle value value Se<:urities of. or auarantccd by, 2(j(),297 273,997 the British Government 315,791 382,819 Other se<:uritics: 8,778 31,426 Listed 7.487 32,487 Direr/ors' Directors' mllla/iOll '-alualion /2,753 31,874 Unlisted 15,050 40,754

281,828 337.297 338,328 456,060

The pri ncipal holdings of equity share capital included in Other securities are as follows:

1982 ]983 Percentoge Percentage Country of htfd held incorporation Orer 20% Agricultural Mortilage Corporation p.Lc. 27 shares of £1 27 (Oreat Britain 19 Portals Holdings p.l...:. ordinary stock Great Britain As a maiter of policy. the Bank does nOI seek to influence" the above companies' commercial or fin ancial decisions. Commonwealth Development Finance Company Ltd: I 'A' ordinary shares of £1 (lOp paid) I 93 'B' ordinary shares of £I (SOp paid) 93 Great Britain Percentage of tota l nominal equity 41 "'Id 42 T he above company is not treated in these accounts as an associate under SSA PI as che Bank considers this treatment would nO! be appropriate having regard to the nature of the investment.

Utukr 20% Finance for Industry p.l.c. shares of £1 IS Greac Britain Bank for International Seulements shares 10 of 2.SOO Swiss gold francs (25% paid) 10 Swit2:erland

2l 14 Inveshnents in subsidiaries Investments in subsidiary companies, all of which are wholly owru:d and registered in England, are stated in the Bank's balance sheet at cost (which is not in excess of the net tangible assets of the subsidiaries) and include: BE Services Ltd 5.000 shares of £1 EBS Investments Ltd 100 shares of £I The Securities Management Trust Ltd 1,000 ordinary shares of £I Slater, Walker Lld 100.000 ord inary shares of £1 1O,000.00Cl deferred shares of £1 The accounts of EBS Investments Ltd and Slater, Walker Lld have not been consolidated with those of the Bank because, in the opinion of the Directors, it would be misleading to consolidate their assets and liabilities with those of the Ba nking Department in view of the circumstances of the acquisition of these companies by the Bank through involvement in the support operations. The accounts of BE Services Lld and The Securities Management Trust Ltd have not been consolidated with those of the Ban k as Ihe amounts are considered to be not material. A dividend of £26,000 was paid by one subsidiary in respect of the year ended 28 February 1983. The net aggregate profits of the subsidiary companies attributable 10 the Bank, which are not dealt with in the accounts of the Banking Department, and wh ich are stated by reference to audited accounts are as follows: 1982 1983 £ lhousands £ thousands 1,999° 78'st For the year ended 28 February 1983 1,280

10,147· 7,8,S6t Sin« acquisition 9,\36

• as reported. t Tt:$tated to exclude unrealised profits in order to comply with the Companies Act 1981. Included within Current liabilities is a total of £I,924,00Cl (1982 £1,132,000) due, in the normal course of business, to subsidiary companies.

24 15 Premises and equipment £ thousands Leasehold Leasehold prcmise.ll premises (SO years (under Freehold and over ~O years premises une~pired) unexpired) Equipment Total Cost or VlIluali(HI At 1 March 1982 117,815 82,415 JO 21,372 221,632 Acquisitions 2,591 I,"", 1,94) 4,760 11,184 Disposals (841) ("~ Adjustment in respect of fully depreciated assets ( 752) (752)

At 28 February 1983 ]20,406 84,305 1,913 24,533 231,217

Accumulated depreciation AI I March ''182 6,950 6,950 Charge for the year 2,170 1,]97 17 3,012 6,396 On disposa ls (704) (704) Adjustment in respect of fully depreciated assets (752) (752)

At 28 February 1983 2,]70 1,197 17 8,S06 11,890

Net book value at 28 February 1983 118,236 83,108 1,956 16,027 219,321

Ner book value 01 28 FebrlUlry 1981 117,815 81,4/5 JQ 14,411 2/4,682

Cost or valuation al 28 February 1983 comprised: At 1982 valuation 1l7.81S 82,41 S J<) 200,260 At cost 2,S91 1,890 1,943 24,533 30,957

120,406 84,305 1,973 24,533 231,217

Contracts for capital expenditure aluhorised by the Directors and outstanding at 28 February 1983 totalled £2,687,000 (1982 £4,099,000). Further capital expenditure authorised at that date, but not contracted for, is estimated at £971,000 (1982 £698,000).

16 Transactions with Directors To comply with the Companies Act 1980, the following particulars are given relating to transactions, arrangements and agreements entered into by the Bank of England with Directors, and persons connected with the Directors, of the Bank: Number of Total Directors amount £ thousands Loans 4 I" There were no quasi loans or o ther credit transactions required 10 be shown under the Companies Act 1980. None of the Directors had a material interest, directly or indirectly, at any lime duri ng the year in any other significant transaction or arrangement with the Bank or any of its subsidiaries.

17 Charitable donations Charitable donations during the year amounted to £90,000; no political contributions were made.

25 18 Contingent liabilities Outstanding exchange contracts for customers, together wi th irrevocable credit s, amount to £125 million (1982 £74 million). These are covered by compensating contracts for correspondi ng amounts. There are further contingent liabil it ies, including uncalled capital on U K investments, of £67 million (1982 £30 million). Since 1930 there has also been a conti ngent liability, denominated in Swiss gold francs, in respect of uncalled capital on the Bank's in,'estment in the Bank for International Settlements. The sterling equivalent of Ihi~ liabil ity bascd on the gold market price on 28 February 1983 ',a~ £226 milhnn (1982 £107 million).

19 Date of approval

The Court of Directors approved the acco unt ~ on pages 17 to ~\1 on )0 June 1983.

26 Banking Department

Statement of source and application of funds for the year ended 28 February 1983

1982 1983 £(}(J(J £()()() Source of funds 53,/69 Operating profit 70,309 Adjustment for items not involving the movement of funds: Provision for losses in respect of Other securities 5,257 2,391 Depreciation, less profits on disposal of fixed assets 6,232

55,560 Funds generated by operations 81 ,798 Funds from other sources : 5 Disposal of Other securities 1,297 4,183 Disposal of premises and equipment 307

59,748 83,402

Application of fun ds 25,035 Payment of taxation 22,OIl 15,000 Payment to the Treasury 18,000 50 Purchase of Other securities 7,560 10,440 Purchase of premises and equipment 11 ,184 9,223 Increase in working capital (see below) 24,647

59,748 83,402

Analysis of increase in working capital 167,950 Current assets 691,821 212,J76 Advances and other accounts 202,972 (1,769) Advances to subsidiary companies (42)

378,357 894,751 (369,134) Current liabilities, excluding taxation and payment to the Treasury (870,104)

9,223 24,647

27 Banking Department

Current cost profit and loss account for the year ended 28 February 1983 1982 1983 £ millions £ millions 53· 2 Operating profit as in historical cost accounts 70·3 Current cost adjustments: 2· I Additional depreciation charge (Note 2) 0·9 J.3 Fixed asset disposals /2·0 M onetary working capital (Note 3) 6·2 7 · 1

37·8 Current cost operating profit 63·2 Payment to the Treasury under Section 1(4) of the Bank of 18 ·0 England Act 1946 23'0

19·8 Current cost profit before taxation 40·2 16·0 Taxation 22·6

j·8 Current cost profit transferred to revenue reserve 17·6

Current cost balance sheet: 28 February 1983 1982 1983 £ millions £ millions /4·5 Capital 14 ·5 205·7 Revenue reserve 223·3 20/·8 Current cost reserve (Note 4) 216·3 439·6

454 ' 1 Current liabilities 3,143' 9

2,696'2 3,598 ·0

950·4 Liquid assets 1,586·8 323·6 Investments 389· 1 1,175 -6 Advances 1,372'7 25 ·4 Subsidiary companies 25·3 221·2 Premises and equipment (Note 5) 224·1

2,696 ,2 3,598'0

The notes on page 29 form part of these accounts.

28 Notes on the current cost accounts

1 Basis The current cost profh and loss account and balance sheet have been prepared on the basis of Statement of Standard Accounting Practice No 16 issued by the accountancy bodies. 2 Accounting policies (a) Except as indicated below, the accounting policies adopted have been the same as those described in nOle 1 on pages 20 and 21. (b) Assets and liabilities are included in the current cost balance sheet on the following bases: Premises-T he figures relating to property interests reflect a professional va luation of Bank freehold and leasehold premises by St Quintin, Chartered Surveyors, as at 28 February 1982, on an open-market value for e~isting use basis, with subsequent additions at cost and having regard to appropriate professional advice. £ijuipment-The figures for the majority of equipment were calculated by using Price index numbers for Currel1l Cost Accounting produced by the Central Statistical Office. The indices used were: (i) Capital expenditure on plant and machinery in paper, printing and publishing;

'"'(ii) Price indices for specific types of office equipment. Figures for the remainder (mainly computer assets) were calculated with reference to suppliers' current price lists. Investments-British Government stocks at cost less provision; other securities at market or Directors' valuation. Olher assets and liabilities- At the amounts shown in the historical cost accounts. (c) Additional depreciation has been charged on premises and equipment in respect of the difference between the depreciation based on the current replacement cost and the depreciation charge in the historical cost accounts. 3 Monetary working capital adjustment The adjustment has been calculated by applying the change in the UK retail price index during the year to the average of the opening and closing totals of net mo netary assets. British Government stocks have been treated as monetary items and included at book value in this calculation. 4 Current cost reserve 1982 1983 £ mi/Jio/t£ £ millions /29·6 Balance at I March 1982 201·8 Adjustment following restatement of 35·8 investments at valuation

165·4 Balance at 1 March 1982 as restated 201'8 Surplus on revaluation of premises, equipment 24'4 and investments 8·3 12·0 Monetary working capital adju$tment 6'2 14'5

201·8 Balance at 28 February 1983 216·3

5 Premises and equipment /982 1983 £ millions £ millions N" Gross Depreciation Net 200·3 Premises 206·1 ,.. 203·3 20·' Equipment 45·3 24 ' S 20·8 221·2 252 ·0 27·9 224'1

29 Issue Department

Account for the year ended 28 February 1983

1982 1983 £000 £000 £000 Income and profits: 921,531 Securities of, or guaranteed by, the British Government 242,1l6 461,858 Other securities 930,332 6,430 Other receipts 1,172,448

Expenses: 28,068 Cost of production of Bank notes 29,510 13,251 Cost of issue, custody and payment of Bank notes 11 ,991 J, 177 Other expenses 1,049 42,550

1,347,323 Payable to the Treasury 1,129,898

Statement of balances: 28 February 1983

1982 1983 1982 1983 £000 £000 £000 £000 Notes issued: IJ ,015 Government debt 11 ,015 10,754,77 J In circulation 11 ,007,915 20,229 In Banking Department 17,085 Other securities of, or guaranteed by, the 4,200,996 British Government 3,285,996 6,562,989 Other securities 7,727,989

10,775,000 11,025,()(X) 10,775,000 11 ,025,000

Notes: The inco me and profits, and value of securities, include the effec ts of the quarterly revaluation of marketable securities, in accordance with the requirements of the National Loans Act 1968. The last such valuation was made at 25 February 1983. 2 The Court of Directors approved the above statements of account on 30 June 1983.

R1CHAR OSON OF DUNTISBOURNE Governor

C W McMAHON Depuly Governor

NELSON Of STAffOR.D DireClor

R 0 GALPfN Chief of Corporale Services

30 Annex

Banking Act 1979

Annual report by the Bank of England 1982/83

Presented 10 the Chancellor of the Exchequer, and by him 10 Parliament, pursuant to Section 4 of the Banking Act 1979 Banking Act 1979

Annual report by the Bank of England

This report on the exercise by the Bank of the III Statutory criteria for authorisation functions conferred on it by the Banking Act 1979 is to carry on a deposit-taking made in pursuance of Section 4(1) of that Act and business covers the financial year of the Bank ended on The interpretation and application of the statutory 28 February 1983. criteri a for authorisation to carry on a deposit­ taking business have been kept under review but remai n the same as descri bed in the Bank's reports for 1979/80 and 1981 /82. The latter report contained I New authorisations and a detailed description of the manner in which the authorisations surrendered or revoked Bank determines whether applicants for recognit ion

During the year ended 28 February 1983 [7 institu~ as a bank meet the criterion of providing a wide tions received licences to take deposits and 8 existing range of banking services. licensed companies were granted recognition as banks. 20 institutions ceased to hold any deposit­ taking authority. Of these, 13 surrendered theiT IV Continuing supervision authority since they no longer wished 10 carry on a The Bank's approach to supervision, based on the deposit-taking business, while 7 had their deposit­ analysis of statistical information and regular taking authority revoked by the Bank under the prudential discussions with the management of powers cOnlained in the Act (see section V below). deposi t-taking insti tutions, was described in last year's report and no material changes have been made in this system d uring the period. As part of a general review of banking statistics some changes IT Published lists of authorised were made to the re porting forms to give the Bank institutions additional in formation on the profi t and loss accounts of deposit-taking institutions incorporated As required by Section 4(2) of the Act, a list of in the United Kingdom and a more detailed maturity recognised banks and licensed deposit-taking analys is of the assets and liabil ities of the larger institutions at the end of the Bank's fina ncial year institutions.l1) is annexed to th is report. This list contains 295 recognised banks and 295 licensed deposit-taking institutions. Included within these figures are 274 Importance continues to be attached to ensuring that branches and subsidiaries of overseas companies. the capital maintained by each institution is adequate The list is regularly kept up to date and the latest to the size, quality and spread of its business. version is avail able from the Bank on request. Although no single level can be fixed as being

(I) A fuller desc riplion oflhe reoiew of bankina slalillics waS gioen in lhe March ]983 issue of lhe Bank's Quarltrly Bul/nil! (page 69).

3J appropriate ror all insti tutions, benchmarks have but the exposure or UK banks as a whole is not been developed which are used when assessing the unduly high: at the end or 1982 UK-incorporated capital adequacy or groups or inst itutions and or banks' consolidated lend ing to the six largest individual institutions within those groups. The borrowing countries experiencing debt servicing Bank has joined with supervisory authorities in difficulties (Argentina, Brazi l, Mexico, Poland, other countries in em phasising the importance or Venezuela and Yugoslavia) amounted to £16. lbi llion. maintaining adequate levels or capital and the need This re presented about 30 % or their total lending to to arrest any deterioration in capital ratios rrom count ries outside the BIS re porting areaUl and present levels. excluding the offshore centres. By contrast the lending of all banks in the BIS reporting area to the six Notwithstanding the rapid increase in lending in both countries was proportionately, marginally greater. the domestic and international markets which has When subsidiaries or foreign banks and consortium taken place over the last few years, the Bank banks are excluded (Le. the calculation relates only considers that the capital ratios of British banks and to British-owned banks) and adjustment is made for licensed deposit-takers over the last 4 or 5 years cross border guarantees, the consol idated exposure have generally been maintained at satisfactory levels. amounted to £ IO.7billion, or the equivalent of 65 % Indeed the capital ratios or major British banks-as of their capi tal base. measured in accordance with the Bank's paper 'The Measurement or Capital' (" - have, on the whole, One particular feature of international markets improved in recent years. This trend has been aided highligh ted by recent debt problems has been that by a rebui lding of resources after the losses of the the overseas branches of banks from countries 1974-5 period, by releases of accumulated provisions experiencing external debt problems have, in some for dererred taxation liabilities to reserves in the cases, faced liquidity difficu lties particularly where, light or SSA P 15, and by the issue of subordinated in nervous market conditions, thei r funding has loan capital to supplement equity. depended in substantial measure on borrowing at short term in the interbank market. The Bank of England, in co-operation with other central banks, While capital ratios provide a guide to the degree of has endeavoured to ensure that lending banks did solvency, the assessment or capital adequacy must not withdraw deposi ts precipitately from banks of also take account of the quality of assets, and the risks the debtor countries, thereby creating liq uidity inherent in them. In the last year the Bank has been problems which could have spread more widely. paying particular attention to the quality of banks' The response to the encou ragement of the authori ties assets in the light of the adverse economic conditions to sustain the position of these banks has on the in both the international and domestic economies. whole been very posi tive, not only in London but in other major financia l centres. International developments A notable development in 1982 was the sharp increase Domestic developments in the number of countries experiencing debt Since the end of terms control on hire purchase servicing difficulties. Some fell into arrears or lending in July of 1982, the Bank has closely suspended payments of principal on their foreign mon itored the terms being offered by institutions. debt and entered into negotiations to reschedule this There is little evidence to date that prudential debt linked to the provision of new finance and standards have been threatened by a relaxation of economic adjustment programmes. Some recognised terms in the face of competitive pressu res. In a few banks have significant ex posures to these countries, cases, however, the Bank has expressed concern

( I ) Reprinted in the September 1980 i ..ue of the 8an"', Qua"~")' 8ulltf;" (pale 324). (2) The 815 repart;n, afea con$;$I$ or Aum;a, 8elgium, LlUembourl, Canada, Denmark, France. WC$! Germany. Ireland, Italy, Japan. Nelherlands, Sweden, SW;lzcrland, the Unilcd KinSdom and the United States.

34 to particular institutions about the prudential year and preferably within 3 months. Failure by an implications of their lending policies. institution to provide accounts within 6 months of its year-end or to submit prudential returns to the Bad and doubtful debt experience and arrears on Bank on time may lead the Bank to review whether domestic commercial lending and on personal the institution concerned continues to meet the instalment credit, in which many licensed institutions criteria for authorisation in Schedule 2 of the Act. specialise, have increased but in general adequate provision for losses incurred and expected appears to The Bank also drew attention to the possible risks to have been made. Profitability and capital resources institutions from fraudulent invitations to participate appear adequate currently to meet any further losses in substantial business. Institutions were urged to be that may be sustained and the Bank does not consider vigilant at all times and the Bank asked to be that the problems which have led to the revocation informed of any questionable offers in order that of the licences of a few small deposit-taking appropriate warnings might be given to other institutions (described in section V below) have institutions. implications for the stability of licensed institutions as a group. Finally, deposit-taking institutions were reminded that they should not give float ing charges over their Circular to authorised institutions assets as security for their own borrowing from A circular was issued to all authorised instilUtions banks or other sources. Where a lender seeks in April 1983 giving guidance on a number of security in the form of a charge over assets, that matters. These were felt to be of particular concern charge must either be applied to specific assets or to some smaller instilUtions, but the circular was limited to a certain proportion of specified assets in sent to all institutions since the principles involved order to ensure that there wou ld always be sufficient were of general application. unencumbered assets to meet the claims of depositors in a liquidation of the com pany. The circular drew attention to the risks attaching to connected lending-loans to companies or persons connected wi th the lending institution, its managers, Money funds di rectors or controllers. In the Bank's view such A particular development over the past year has been lending can be justified only when undertaken for the growth in the establishment of money funds. the clear commercial advantage of the lending These are schemes which pool monies for investment institution and should be negotiated and agreed on in the wholesale and other short-term money markets an arm's length basis. and thus can offer a higher rate of interest than conventional deposit accounts. There are two types The circular further emphasised the need to keep of scheme. The first is operated by a deposit-taking large loans to individual customers within prudent institution which accepts monies in its own name limits. Exposures (loans, acceptances, guarantees, so that they are a liability of the company and elc) to one customer or group of customers should appear on its balance sheet. In practice this type of not normally exceed a modest proportion of an scheme is provided by institutions which are already institution's capital base and, where higher exposures authorised to accept deposits and so will have occur, the institution would normally be requested satisfied the Bank that they meet the statutory to maintain a level of capital resources significantly minimum criteria for authorisation. The Bank higher than that which would otherwise be required. discourages the description of such on-balance sheet It was also made clear that the Bank expects to schemes as 'funds' since the assets in which the high receive copies of the annual report and audited yielding deposits have been employed are not accounts of each supervised institution not later than segregated from the other assets of the deposit-taking 6 months after the end of the institution's financial institution.

35 The second type of scheme is operated by a managing The circum stances that are taken into account in institution which accepts monies under a trust considering revoca ti on include evidence that the agreement and holds them outside its own ba lance capital invested in the business has become inadequate sheet. Where they are managed in the United to absorb actual and future losses; that liquid ity Kingdom, these off-balance sheet money funds has become insufficient to meet obligat ions likely to customarily take the form of a unit trust in wh ich fa ll due; that provisions set aside to cover bad and investors part icipate in a common fund. Unit trusts doubtful debts are deficient; or that there is other and other forms of investment in which the subscriber evidence of imprudence or impropriety on the part has ti tle to assets of uncertain value do not normally of those directing an institUl ion's affairs. The Bank fall with in the scope of the Banking Act. However, expects directors, managers and controllers to carry the definition of a deposit in the Banking Act as 'a out their individual and collective responsibilities sum of money paid on terms under which it will be with integrity and professional skill. Instances of repaid .. .' means that institutions managing money lack of judgement, recklessness, provision of false funds in the United Kingdom which offer capital information to the Bank, failure to keep proper certainty to investors, in addition to yield , are, in books and records or undue reliance on a single the Bank's view, deposit-taking businesses in terms person in the direction of the business call into of the Act nnd will need to satisfy the minimum question the prudent conduct of the business and the criteria for authorisation. The Bank expects fitness of those responsible to hold their positions. managing insti tutions to observe particular guidel ines in relation to such money funds to minimise the risk Where it appears that there are grounds for to depositors. These include confining assets held to revocation, the Bank will always have regard to the nominated low risk, short-term assets; matching likelihood of any corrective measures proposed being of maturities between liabilities and assets; the successful before initiating revocation proceedings. arrangemen t of fidel ity insurance against breach of The Bank will also have regard to the risks to which trust : and agreement with the Bank on an amount depositors may be exposed during any period of of capital to be avai lable to the fund as a reserve recovery or reconstruction, especially in the light of against losses. the maturity structure of assets and liabilities. In some circumstances it may be considered appropriate The Bank has co-ordinated its policy towards money to revoke a fu llliccnce and grant in its place a licence funds with the Department of Trade, whose interest subject to condi ti ons in order to contain these risks arises because off-balance sheet funds are unauthorised while the remedies take effect. Where the grounds for unit trusts in terms of the Prevention of Fraud revocation arise from deficiencies in management or (Investments) Act 1958 and whose permission is control, remed ies may be more difficult to construct. therefore necessary for any circulars which the During the year the Bank revoked the licences of managers may wish to issue because of the seven deposit-taking companies. Two of the seven restrictions in that Act on the distribution to the appealed (under the provisions of Section II of the public of investment circulars. Banking Act) against the Bank's decision but subsequently withdrew their appeals. In one case the Bank revoked the company's licence and granted in V Revocation of recognition or a its place a licence subject to conditions. licence In deciding whethe r to use its powers to revoke the Most of the revocations were of licences which had authorisation of a particu lar institution, the Bank originally been granted in transitional form. The Act has to consider the degree to which the interests of provided that during the initial period after it came existing and future depositors are seriously threatened into force the Bank might grant transitional licences and whether the problems that the Bank has identified to institutions already taking deposits, which did not are capable of remedy. at the time fulfil all the statutory minimum criteria

J6 for the grant of a full licence but which, in the view institution concerned and to enable the Bank to of the Bank, might reasonably be expected to do so mon itor significant day-to-day developments. with in, at the most, two years of the grant of the licence. This provision was designed to give small deposil-taking businesses which had not previously VI Winding up been subject to the Bank's prudential supervision an During the year or shortly afterwards four companies opportunity to comply with the provisions of the which had formerly held licences to take deposits Act over a period rather than obliging them to cease were wound up by the court. They were Merbro trading as deposit-taking companies. To obtain such Finance (NI) Lld, First Guarantee Trust Company a licence, they had to satisfy the Bank that they Lld, Goodwin Squires Securities Lld and Trinity could successfully carry through the necessary Trust and Savings Ltd. Merbro Finance (NI) Ltd measures involving, for example, the removal of was wound up on a petition by the company itself, floating charges over their assets, the reorganisation whereas the Bank was the petitioner in the other of group structures, the recruitment of new personnel, three cases. Section 18 of the Banking Act provides the introduction of fresh capital and the remedying that, on a petition presented by the Bank, the court of other balance sheet deficiencies. Over fifty may wind up an authorised institution or formerly transitional licences were granted, the great majority authorised institution which still has deposits of which were subsequently replaced with full outstanding, if either the institution is unable to pay licences. However, five of the seven cases of sums due and payable to depositors or the value of revocation referred to above were holders of the institution's assets is less than the amount of its transitional licences. Th ree of these, Merbro Finance liabilities. (N I) Limited (formerly Merchant Banking Northern Ireland Li mited), First Guarantee Trust Company Limited and Trinity Trust and Savings Limited, have VD International s up cnisor~' subsequently gone into liquidation (see section VI committees below) and in each case claims have been made on During the year the Bank continued to play a full part the Deposit Protection Fund. There are now no in international co-operation between supervisory institutions holding transitional licences. authorities. The Bank participated in

The grounds fo r moving to revoke the licences of the • the Committee on Banking Regulations and seven institutions referred to above varied but the Supervisory Practices which meets at the Bank Bank considered that all had conducted their for International Settlements in Basle and business without the care and prudence required of brings together supervisors from the Group of a deposit-taking business. Some had suffered Ten major industrialised countries, Luxembourg considerable losses and had been unable to achieve and Switzerland, and is chaired by Mr W P prudent levels of capital and liquidity; in some cases Cooke, Head of Banking Supervision at the business was excessively concentrated in loans to Bank of England. associates; some had failed to keep proper records • the Banking Advisory Committee to the and had been consistently late in fi ling the quarterly European Commission. returns wi th the Bank; and some had misled the the Contact Group of Supervisors from the Bank about material aspects of their business. • member states of the European Community.

On each occasion that the Bank revoked an The Basle Supervisors Committee continued to institution's licence during the year it also gave providean important forum in which supervisors from directions under Section 8 designed to protect the the main financial centres were able to discuss their interests of depositors. The purpose of these approach to the supervision of banks, particularly in directions was to restrict the business of the the light of the debt servicing difficulties faced by

37 some borrowing countries referred to earlier. The revocation of licences, the introduction of new Committee completed its revision of the paper agreed prudential returns, and the monitoring of the in 1975, which set out the principles governing repercussions on the banking system of international supervisory responsibilities in respect of banks' debt problems. foreign establishments, and wh ich has become known as the Concordat. This revision was published in June 1983. Other areas to which the Committee IX Orders and regulations addressed particular attention included the maturity The fo llowing orders and regulations we re introduced transformation undertaken by banks in their under the Act- international business, and various aspects of capital /982 No 1681. The Banking Act 1979 (Excepted adequacy for banks operating internationally. The Persons) Order 1982 Committee continues to build on established This added the International Bank for Reconstruction relationships with supervisory authorities worldwide and Development and certain other international and in particular with the Offshore Group of organisations to the list of persons contained in Supervisors and with the Commission of Latin Schedule 1 to the Act to whom the prohibition in American and Caribbean Supervisory Authorities. Section 1(1) on the acceptance ofa deposit does not apply. The Order came into operation on 17 The Bank participated fully during the year December 1982. in discussions on a number of proposals by the European Commission for directives having 1982 No 1808, The Deposit Protection Fund (Excluded implications for credit and financial institutions. In Institutions) Order 1982 particular, the Commission submitted to the Council This excluded certain listed institutions from the of Ministers in February 1983 an amended version of requirement to contribute to the Deposit Protection the proposed directive on the supervision of credit Fund, deposits with them becoming removed from institutions on a consolidated basis. The Directive the protection afforded by Section 28 in the event of has now been adopted. insolvency. The Order came into operation on 10 January 1983. Within the European Community. the Bank 1983 No 510, The Banking Act 1979 (Exempt continued to be involved in work on the construction Transactions) (Amendment) Regulations 1983 and refinement of a number of observation ratios, Earlier Regulations prescribed certain transactions provided for under Article 6 of the First Banking to which the prohibition on deposit-taking in Section Co-ordination Directive of 12 December 1977. 1(1) does not apply. These Regulations added to the A second trial calculation of ratios comparing categories of exempt transactions the acceptance of a the solvency, liquidity and profitability of credit deposit in certain specified circumstances by institutions was carried out during 1982. commodity and futures brokers who are members of certain market organisations. In addition, the VHI Administration Regulations added to the categories of exempt By the end of the year under review the number of transactions the acceptance by certain clearing full-time staff employed on banking supervision had houses of a deposit made by one of their respective increased from 88 to 101. This enabled the Division members. These Regulations came into operation on to meet the additional workload arising from the 26 April 1983.

38 Banking Act 1979

Li$1 al 28 February 198J

The Bmish Linen Bank Ltd. Brown, Sniplcy &. Co. Ltd. A r Sank ud. Canadian Imperial Bank of Commerce Aleund." Discouni p.l.c. Carolina Bank Lld. AI~em.ne Bank Nederland N .V. Allied Arab Bank Ltd. Cater Alien Ltd. Allied Bank International Centcrre Dank N.A. Allied Bank of Pakistan Ltd. Central Bank of India Allied Irish BankS Ltd. ~ntral TnlSl" Savin,. Bank Lld. Allied Irish Investment Bank Lld. The Chane,cd Bank American Express International Banking Corporation Charlerhouse Japhcl p.Le. American Nalional Bank and Trust Company of Chic.allo Chase Bank (Ireland) Ltd. The Chase Manllauan Ban~. N.A. Ame~ Ba nk Ltd. Amsterdam·Ronerdam Bank N.V. Chase Manha!!an Ltd. An,lo·Romanian Bank Ltd. ChemIcal Bank Henry Ansbacher & Co. Ltd. Chemical Bank International Ltd_ Arab Bank Ltd. The Clto-He... ns Bank, Lld. Arbuthnot Latham Bank Ltd. The Chuo Trus! &. Banking Company Lld. Associated Japanese Bank (international) Ltd. N.A. Atlantic International Bank Ltd. Citicorp International Bank Ltd. Clive Di$Coum Company Lld. AUSlralia &. New Zealand Bankine Group Ltd. CJydcsdalc Bank p.l.e. Comerica Bank- Detroit Banca Commerciale ltaliana Commercial Bank of Korea Ltd. B.n~l Nazionale del Lavoro The Commercial Bank of the Near EaSt p.l.e. Banco Central, S.A. Commercial Bank of Wales p.l.e. Banco de Bilbao S.A. Commcubank A.G. Banco de la Naci6n Argenlina Commonwullh Tradinl Bank of Allmaloa B~neo de Santander, S.A. Continental Illinois Ltd. Banco de V,zcaya S.A. Continental Illinois Nuional Bank and Trust Comjnny ofCho<;aeo Banco di Roma S.p.A. Co.opcrat,ve Bank p.l .~ . Banco do Brasil S.A. Coumy Bank Lld. Banco do Eslado de $lo Paulo S.A. Coults &. Co. Banco Espirito Sanlo e Comercia] de Lisboa C,Mit Industriel ct Commercial Banco Exterior- U.K. S.A. CrMit Lyonnais Banco Mercanti] de S~o Paulo S,A. CrMit Sui$$j: Banco Nacional de Me~ico S.A. Credit Suine First 80ston Lld. Banco Portu/ut, do Allilntico Crcd itanSlah-Bank verc,n 9an~0 Real .A. Credilo haliano Banco TOlla & A50rcs E.P. Cro~ker National Bank Banco Urquijo HlSpano Americana Ltd. The Cyprus Popular Bank Bancomcr. S.A. 9an~kok Ban~ Ltd. The Dai·lchi KanllYo Bank. Lld. Bank Julius Baer & Co. Ltd. The O'lwa Bank, Ltd. Bank Bumipulra Malaysia 8erhad A.G. Bank fur Gemeinwirtschaft A.G. Discoum Bank (Over~as) Lld. Bank Hapoalim B.M. Drcsdner Bank A.G . Bank Leumi (U.K.) p.l.c. Bank Mellat Euro·Latinamerican Bank Ltd. Bank Melli Iran European Arab Bank Lld. Bank of Amen~ Inlernational Ltd. European Banking Company Ltd. N.T. &. S.A. Europeao Brnihan Bank Ltd. Bank of Barnda TI>e Bank of California N.A. The Fidelity Bank Bank of Cerlon First City National Bank of Houston Bank of Ch,na FifSl [ntemale Bank of California Bank of Cyprus (London) Ltd. The First National Bank of Boston Bank of India The FiUt Nuional Bank of Chicago The Bank of Ireland Firsl Nalional Bank of Maryland Bank of London & South America Ltd. Firsl National Bank of Minneapolis Bank of Montreal FirJI Pennsylvania Bank N.A. The Bank of New York First Wisconsin Nalional Bank of Milwaukee Bank of New Zuland Ro~rt FlcminS & Co. Ltd. The Bank of Nova Scotia French Bank of Southern Africa Ltd. Bank of Scotland The Fuji Bank, Ltd. The Bank of Tokyo, Ltd. Bank of Tokyo tnternltional Ltd. Gert"1lrd & National p.l.e. The Bank of Tokyo Trust Company Ghana Commercial Bank The Bank of Yokohama Ltd. Antony Gibbs & Sons, Ltd. Bank Saderat Iran Git"1lrd Bank Bank Sepah Gray Pawes Dank p.l.e. Bankers Trust Company Grindlay Bt"1Indts Ltd. Banquc BeIge Ltd. Grindlays Bank p.l.e. Banque Belgo·Zairoise S.A. Guin... u Mahon &. Co. Ltd. Banque Bru~elle s Lam~rt S.A. Gulf International Bank B.S.C. Banque Francaise de Credit International Ltd. Danque Francaise du Commerce Extericur Habib Bank A.G. Zurich Banque tndosucz Habib Bank Lld. BanQue Nationale de Paris p.l.e. Hambros B~nk Lld. Banque Paribas Hani! Bank Bardays Bank p.l.e. Iln,,;s TrU$1 and Savings Bank Barclays Bank Intcrnational Ltd. Ilavana tnlernalional Bank Lld. Barc]ays Merchant Bank Ltd. Hessischc Landesbank-Girozentrale_ B.rin$ Brothers & Co. Ltd. Hill Samuel & Co. Ltd. Baycnsche Hypotheken-und Wtchsel- Rank A.G. C. lioa~ &. Co. Bayerische Landesbank Girozentrale The Hokkaido Takushoku Bank. Ltd . Baycrische Ve~insbank The Hon,konll and Shanghai Banking Corporation The Brilish Bank of the Middle East HunBarian tnternational Dank Ltd.

39 The Industrial Bun~ of Japall. Ltd. Security Pacifoc National Bank I mer F ,,~t Ba nk Oallas. N.A. Shanghai Commercial Bank Ltd. lnte'''alional Comnlercial Bank p.l.e. Sin,er &. friedlander Ltd. International Encr8Y Bank Ltd. N. V.Slavenbur,·s !lank ' nternational MUlean Bank Lld. Smith SI. Aubyn &. Co. Ltd. Interml1ional WeStminster Bank p.l.e. Socict~ de I».nque Occlden,ale Irvin~ T"'$t Company Soci~te Ocrll!ralc l tahan International Bank Ltd. Societe Otntnllc Bank Lld. Sonah Bank Japan International Bank Ltd. The Standard Bank pJ .c. JcsseJ. Toynb« &. Oillcu p.1.c. Bank p.l.c. Johnson Mal1hey Bankers Ltd. Standard Chartered Mer<:hant Bank Ltd. LcopOld Joscph &. Sons lid. State Ba nk of India The Sumnomo Bank. Lt d. KIng &. Shu$On p.l.e. T I>c Sumitomo Trust and Banking Company Ltd. Kleinwoft . [k"son Ltd. Sw,ss Bank Corporation Korea E~change Bank Syndicate Bank Korea I'mt Ban~ f hc Kyown Bank. Ltd. The T a,yo Ko"" Bank Ltd . Texas Con'mcrce Bank N.A. Lala,,1 Drotheu &. Co., Ltd. The Thai fumers Dank Ltd. Libra Bank Ltd. The T okai Bank. Ltd. Lloyds Bank p.l.e. The Toronto·Dominlon Bank Lloyds Bank International Ltd. Toronto Dominion International Bank Ltd. Lloyds Bank International (F,anee) lid. The Toyo Tr .. " &. Banking Company Ltd . London &. Cominemal Bankers Ltd . Trade Development Bank London Intemale Bi,nk Lld . The long_Term Cred it Dank of Japan. Ltd. UBAf Bnnk Ltd, Ulster Bank Ltd. MAIBL p.l.c. Union Bank of Switzcrl"nd Malayan B ankin~ Berhad The Union D i sco un~ Company of London p_l.c. Manufacturers Hanover Lld. Uni~ed Bank Ltd. Manufacturers I·hnover Trust Company The United Bank of Kuwait Ltd. Marine Midland Hank N.A. United Commercial Bank Mcllon Bank. N.A. United Overseas Bank Ltd. Mercantlle Bank Ltd . Merrill Lynch lntcrnatlon~l Hank Ltd. S.G.Wurburg &. Co. Ltd. Midland Bank p,l.c. Wells Far,o Bank N.A. The Mltsubishi Bank Ltd. Wcstdeutschc Landesbank Girozcntrale The Mitsublshi Trus~ and Banking Corporation Westp.ac Banking Corporation The Mitsu, Bank Ltd. W,lIiams &. GI~n' l Bank p.l.c. The M,tSUI TruSl &. Banking Company Ltd. Wintrust Securoties Ltd. Samuel Monta,u &. Co. Ltd. Wlimembe'gillChe Kommunale Landesbank Gim~enlralc Morpn Grenfcll &. Co. Ltd. Mor,3n Guaranty Tru5t Company of New York The Yasuda Trust and Banking Co., Ltd. Mo$C;<.lw Narodny Bank Ll d. Yorkshire Bank p.I.~. Muslim Commcr<:,al Bank Ltd. Zambia National Commercial Bank Ll d. NCNB National Bank of North Carolina Z,vno$tensk' Banka National Corporation NatIonal Bank of Abu Dhabi National Bank of Canada Na~ional Bank of DetroIt 1 U~~nstd d~po.lt·tating instituhons National Bank of G,eece S.A. The Nauonal Bank of New ZUland Ltd. Al (Investment) Ltd Natlonal Ha nk of Pakistan Abbey F,nance Co. Ltd. National Comn,cr<:ial Banking Corporation of Allstralia Ltd. Afehan NatIonal Credi' & Finance Ltd. Nallonal Wes~mln Slcr Bank p.l.e. Afri(~n Continental Bank Ltd. I'Icdbank Ltd. Aitken 1·lume Ltd. The NIppon Credit Bank. Ltd. AI SaudI Banque S.A. Noble Orossart L~d. The Alliance Trust p.l.o. Nordic Bank p.l.c. Allied Iri sh Finanoe Co. Ltd. Northern Bank Ltd. AltQjor Ltd. The Northern Trust Company An~lo_Yugos l av (LOT) Lld. Arab Bank In vestment Co, Ltd . O"on Royal B,,,,k Ltd. Arab Banking Corporation A.S.C. Oversca.Cr.incsc Hank inK Corporation Ltd. Armada Investments Ltd. Overseas Union Bank Ltd. Atmco Trust Ltd. As se mblies of Ood Property Trust PK Chris~iunia Ilank (UK) Ltd. AS'iO,i~ted Credits Ltd. P" ~e & Gwylher Ltd. AssoeiatC5 Capitul Corporation Ltd. PhIlippine National Bank Auban Finance Ltd. I'rivatbanken Ltd. Ayco Trust Ltd. l'unj~b National fl:tnk B. C. F. Finance Co. lid. Oata, Nation"1 Bank S.A.Q. BM I (Ihmpshire) lid. Gerald Q .. IO. Cope &. Co. Ltd. Badischc K ommu n~l e Landesbank Oirozcntrale Banea Serfin. S.A. Ratldain Bank Banco de Jeru S.A. Rea Brothers p.l.e. Banco dl Siclli~ P.S. Refson &. Co. Ltd. Bank Handlowy w Warnawie S."'. RepubltcBank Dallas, N.A. Bank Mus &. I-I ope N.V. Resc~ Bank of Australia Bank of Crcdlt and Commer<:e International S.A. The R,gss National lIa nk of Washington, D.C. Bank of Ireland FInance lid. I'I.M.Rothschlld &. Sons Ltd. Bank of Ireland Fmance (N.I .) Ltd. TI>c Royal Bank of Can~da The Ba nk of Nova Semia Trust Company The p.l.e. (UnIted KIngdom) Ltd. TI>c Royal Trust Company of Canada Ba,," of Oman Lld. Bank of Seoul &. Trust Co. TI>c Sunama Bank. Ltd. Bank Tejarat The Sanwa Bank. Ltd. Bankers Trust International Ltd. Saudi International Ba nk Ba"Que du Rho!\C cl de la Tamisc S.A. (AI_Bank AI·Saud, AI-Alami Ltd.) The Baptist UnIon CorpOration Ltd. Scand,navlan Bank Ltd. Ba rbados National Bank J.llen,y Sehrodcr Wags &. Co. Ltd. Barclays Bank Trust Company Ltd. ScaUI_F"St National Bank fl arclays flank UK Lld. Scccombc Marshall &. Campion p.l.e. Thomas lIarlow &. Bm. Ltd.

40 aeaver InvestmentS Ltd. Ford Financial TrU St Ltd. B.irut Riyad Dank S.A.l. Ford MOlor CredIt Co. Ltd . S. ... fic,a l Trusl Ltd. Forward Trust Lld. Dedi ... , Dank A.G. Roberl frase. &; Partners Lld. BaSIon Trust'" SaV'"KS lid. Bowmakcr Ltd. GillcSpie Bro, . '" Comp. ny .. Ltd. . Bradford hw.surenlS Giro~entrale und Dank der ostcrre.duscl\en S J>ll rka ~ !iCn A.G. S'ema. Holdln, ' Ltd. Goldman Sach.$ Ltd . Br idgeovcr lid. Good., Durranl Tru5t p.l.e. BridJeway Finance Ltd. H. T. Greenwood Lld . BrI,ish Credit T ru$l Ltd. G=,,...,II Fi nal>« Lld. Brook Secu.;I>CS '" Co. Lt d. Gresh.m Trust p.l.c. Buchanan Securiuu Ltd . Greyhound Guaranty Ltd. Bucks Land &; Building Co. Ltd. Grindtays Humberdydc LLd . Sunic &: Co. Ltd. Grindlays Indusmal Fmance Lld. Du.hnglon Investments Ltd. Grosvenor Acceptanees Lld. Burns-Anderson Trust Com~ny Ltd. Gulf Guaranlu Trust Lld. ausiness Mortgases Trust fI.i.C. Byb!os Bank S.A.L. HFC Trust Ltd. H. & J. fin~nce Co. (Midl~nd s) Lld. ClIku!u s Finance p.l.e. The Hardware Federation finance Co. Ltd . Canada Permanent Trust Co. (U.K.) Lld. Hargrave S.,uritiu LI<.I . Caua d, Ris~armio delle I'rovoncie Lombarde Harrods Trust Lld. Cast!e Court Trust Ltd. Harton Securities Ltd . Castle l'hillips Finance Co. Ltd. The Heritable &. General Trust Ltd . Cattles Ho!dings FiMnee Ltd. Hobart Securities Ltd. Cayzor Ltd . Holdenhurst Securities Lld . Cedar Holdings Ltd. Houston Financial Services Lld. Century Factors Ltd. Chancellor Finance Ltd. IHJ Internat ionJI Ltd. Chancery Securities Ltd. Industrial financc and In,·eSlment Corporation p.l.c. Charter Consolidated Financial Services Ltd. Industrial FundinB Trust Ltd. Chartered TrUSt p.Le. The Investment Bank of Ireland Ltd. Charterhouse Japhet Credit Lld. Investment Trustees Ltd. Chesterfield Street Trust Ltd. Iran Overseas I.nvestment Corl':!!ration Ltd. Cl' ChoululOn. Sons &. Partners Ltd. Istituto Banea"o S~n Paolo dl Torino Citib.nk Trust Ltd. City TrusI Ltd. hb"" Finances Ltd. Clo"" BrOlhe u Ltd. Joliman Finance Ltd . Clydesd.le Ha nk Flnlln<;e Corporation Lld. CE CO.les &. Co. Ltd. Ku slc:r f ederal Credit Union Cobna. Finlln<;e Co. Ltd. King,north Trust Lld . Colonial Ba nk K.ntyre Secumie. Lt<.l . Combined CapItal Lld. Knowsley &. Co. Lt<.l . CommercIal Credit ServICes Ltd. Commonwealth Savings Bank of Australia Little Lake. Finance Ll d. Consolidated Credits &. Discounts Ltd. Lloyds &. Seoll.sl> pJ.c The Continental Trust Lld. Lloy([ s &. ScOlllsh Trust Lt<.l . Co·operatove Bank (Commercial) Lld. Uoy<.l . Bank (LABCO) Ltd. Coun. Finance Co. Lodh. Finance Ltd. Cranehellth Secuflue. Lld. Lombard Aece[)t~nce s Lt<.l . Crtdit du Nord Lombar<.l & Ulster Ltd. Cross &. Bev;ngton! (Finance) Ltd. Lombar<.l North Central flJ .C. Cue &. Co. Lombard Street In,·estment Tru, t Co. Ltd. Cyprus Crc4il a.nk Lld. London Law SecUfltles Lld. CYflruS FinaJlCC Corpo,"ion (London) Ltd. Lon<.lon Scollish Finance Corporation pJ.c. Lordsvale Finance Lt<.l . Oalheanie Finance Co. LI<.I. Darlington Merchant Cre<.li\S Ltd. M.H. Credit Corporation Ltd. Oartington &. Co. Ltd. MeNeill Pear. on Lt<.l. O.wnay. Day &. Co. Ltd. Mallinhall Lld. Oeutsche Genonen",hafl$bank Manchester Exchange Trust Lld. The Development Bank of Singapore Ltd. w. M. Mann &. Co. (Investments) Lld. Oryfield Finance Ltd. Edward Manson &. Co. Ltd. Dunbar &. Co. Lt<.l. Manufacturers Hanover Export F inance Ltd. Duncan Lawrie Ltd. Manufacturers Hanover Industrial Finnnce Ltd. Dunsterville Alien p.l.c. The Mardun Investment Co. Ltd. Mathoson Trust Co. Ltd. E. T. Trust Ltd. Mo<.le" s Tru" Lld . East Anglian Securities Trust Ltd. Me,hraj &. Sons Lld. East Midland. Finance Co. Ltd . MereantHe Credit Company Ll d. Eastcheap Investments Lld. Mercury J>rovidcnt SOXlety Ltd. Eccles Sav;n,s and Loans Lld. Merseyside finance Ltd. The English As.oc:iaLion Trust Ltd. The Methodist Ch"pel Aid Association Ltd. Ensign OiS<.:ount Co. Ltd. Middle East Bank Ltd. Equatorial Trust Corl?"ration Lld. Midland Hank Finance Corporation Ltd. Eve~lI Chellle ASSOCIates Midland aank Industrial Equity Holdings Lld. Exetcr Tru", Lt<.l . Midland Bank TruSt Company Lld. Milford Mutual FacIlities Ltd. F &. C Management Ltd. Minstcr Trust Lt<.l . FFl (UK Fonance) p.l.e. Moneyear. Lld. FlBl Finan<;ial Trust Lt<.l. MoorKale McreantHe I·[ol<.ling' p.l.e . Fairmount Trust Ltd. Mortgage Manap:ment &. Investments Ltd. Family Finance Ltd. Mount Credit Corporation Lld. Farmers (WCF) Finance Lld. Multibanco Comermcx S.A. Federated T ru1t Corporation Lld. Musket Finan,e Lt<.l . Fi nance for In<.lustry 1 .I.c. Mynshul Trust Ltd. FInancial and Genera Securitie. Ltd. Jame. Finlay Corporation Lld. N.I.I.B. Group LI<.I . Finova Finance Lt<.l. National Bank of Egypt First Bank of Nigeria Lt<.l. National Da nk of FOri Sam HouSlOn f ,rst Co·operative F,nance Lt d. The National Bank of KuwaIt S.,\.K . First IndemMy Credit Lld. National Bank of Nigcfla Lt<.l. First National Boston Lld. National Commcreial & Glyns Ltd . First National Securities Lt d. National Guardian Finance Corporation Lld. Fleet National Hank Ne<.lcrlandSChe Mid<.len,tnn<.lsbank N.V.

41 New Nigeria Ban k Ltd. Southsc:a Mort~agc &. Investment Co, Ltd. M. J . .... Nightinple &. Co. Ltd. Sprint Gardens Securitiu p.l.e. The North of Scotland Finance Co, Ltd. Spry ' innnce Ltd. North West Seeu.ities Ltd. Standard Credit Services Ltd. Northern Bank Development Corporation Ltd. Standard Property Investment p.l.c. Northern Il:Ink Executor &. Trustee Company Ltd. State Dank of VictQria Northern Ireland Industrial Bank (I.O.M.) Ltd. SterLing Trust Ltd. NO'''''leh GenerlL Tru ~ t Ltd. Swin Dank Corporation International Ltd.

OrientaL Credit Ltd. TCD Ltd. OverSC:J! Trust Bank Lld. The Tcacl>ers &. General Investment Co. Ltd, Tu u Commerce International Ltd. PL In"estments &. Savings Ltd. Thornditfe Finant;C Ltd. PSI' &. Comp;lny (UK) Ltd. Trcloan Lld, Park Street Securities Lld. Trucnnda Trutts Ltd. The l'eOple's Trust &. Sav;n,,! Lld. Tullett and RHey Money Managemelll Ltd. Phlbrobank A.G. Turkish Bank Ltd. !'Qinton York Ltd. Tyndall & Co. Prestwick Investment Trust p.l.e. I'unjab &. S,nd Bank Ulller Dank Trust Company Ulster InvCJtment lIank Ltd. Ralli In,'eltment CQmrany Ltd. Union Bank of India R. Raphnel &. SQns p ..c. United Dominions Trust Ltd. Rathoone Bros, &; CQ, Universal Credit Ltd. Reliance Trust Lt d. Repuhlic National Sank of New York Rhone Trust Lld. Barrie Vanger &. Co, Ltd. Roxburghc Guarantee Corporation Ltd. Venture F;nan~e Ltd. The Rural and Industries Bank Qf Western Australia Vernon$ Trust Corporation Vo lksku International Ltd. S. I'. Finance Ltd. St. Margaref! Trust Lld. Wagon Finance Ltd. S!. Martin.le·Grand Securities Ltd. \V.Haec. Smith Trust Co, Lt d. Dav;"1 Sa.soon &. CQ. Lld. Wells Fargo Lld. S"tu'" Investment Management CQ. Ltd. West Riding Securitic~ Lld. Saviro~s I.larok of South Australia Weltern Trust & Savings Ltd. Sehrodcr Lns;n; Ltd. Whiteaway Laidlaw & Co, Ltd, Security PacifIC Trust Ltd. Wimbledon & South West Finance Co. Ltd. Shawlands Securities Lld. N. 11. Woolley & Co. Ltd. The Siam Commercial Dank. Ltd. Smith &. WilltamSQn Securit;u Yorkshire Bank Finant;C Ltd, Soulh NolIS FInance Ltd. H. F. Young & Co. Ltd.

42