Balances with the Bank of England/UK central bank
On 1 June 1998 a statutory scheme came into effect that meant both banks and building societies with average eligible liabilities of £400 million or more were required to hold non-interest-bearing deposits with the Bank of 0.15% of their eligible liabilities in excess of £400 million.
With effect from 1 June 2004, the threshold for average eligible liabilities was raised to £500 million and deposits collected on banks’ eligible liabilities over £500 million. The percentage was reduced to 0.11% on 2 June 2008.
With effect from 3 June 2013, the threshold for average eligible liabilities was raised to £600 million. The level of each institution's cash ratio deposit is currently calculated twice yearly (currently in May and November) at 0.18% of average eligible liabilities, over the previous six end-calendar months, in excess of £600 million.
These are balances with the Bank of England other than cash ratio deposits.
- UK MFIs includes all money (including correspondent balances, finance leasing and initial margin payments relating to futures and options contracts) lent to, or placed on deposit with, other UK MFIs (excluding the Bank of England) and bills drawn by other UK MFIs under acceptance credit facilities that the reporting institution has itself discounted. Overdrawn accounts are included under deposits.
- UK MFIs CDs include holdings of promissory notes and other short-term paper issued by other UK MFIs.
- UK MFI commercial paper includes MFIs' holdings of commercial paper issued by UK-resident MFIs.
- all balances (including correspondent balances) with, and funds lent to, non-resident banks (except trade and portfolio investments)
- bills drawn by non-resident banks under acceptance credit facilities opened by the reporting institution which the reporting institution has itself discounted
- certificates of deposit, promissory notes, commercial paper and other short-term paper issued by non-resident banks and owned by the reporting institution.
Acceptances granted comprise a claim on the counterparty whose bill the MFI has accepted, except bills both accepted and discounted by the same MFI. The latter are included as lending unless these bills are subsequently rediscounted. Acceptances are classified according to the customer who has asked for the acceptance facility to be opened.
- MFIs’ bills comprise all sterling bills which have been accepted by another UK MFI, including sterling bills issued by the Bank of England.
- Treasury bills are short-term debt securities (with original maturity of up to 364 days) of the UK government.
Other UK residents includes:
- local government bills
- public corporation bills not accepted by UK MFIs
- sterling commercial paper issued by other UK residents
- UK paper not included elsewhere.
It excludes bills connected with lending under the special schemes for exports and domestic shipbuilding, and bills which the reporting institution has disposed of by rediscounting. Bills and notes are classified according to the currency in which they are drawn.
Claims under sale and repurchase agreements comprise cash claims arising from the purchase of securities for a finite period with a commitment to re-sell. Claims which arise when securities or other assets are purchased in exchange for other securities etc. are excluded. The amount of the claim (or its currency denomination) is determined by the cash consideration, not the market value (or currency denomination) of the securities.
These include all balances with, and lending (whether against collateral or not) to, customers not included elsewhere. They include amounts receivable under finance leases and the reporting institution's own acceptances that it has also discounted (except those drawn by other UK MFIs and non-resident banks, which are included in market loans). Own acceptances discounted are shown as advances to the party who has asked for the acceptance credit to be opened.
Advances purchased by or assigned to the reporting institutions under a transferable loan facility or similar arrangement are included, but loans where the borrower is a UK MFI, a non-resident office of the reporting institution or another non-resident bank are reported under market loans. Provisions for bad and doubtful debts are not deducted. Where the reporting institution participates in (or acts as manager or co-manager of) a loan financed by more than one institution, only the reporting institution's participation for its own account is included, the loan being classified according to the ultimate borrower. See the note below on residential status for the definition of UK and non-residents.
Advances to the UK public sector includes all loans to central and local government and public corporations.
Advances to non-residents include all lending for exports under the Export Credits Guarantee Department bank guarantee (excluding any amounts refinanced).
These include all securities beneficially owned by the reporting institution. They include securities which the reporting institution has sold for a finite period, but with a commitment to repurchase (i.e. repos), but exclude securities which have been bought for a finite period, but with a commitment to resell (i.e. reverse repos). Securities are defined as marketable or potentially marketable income-yielding instruments including bonds, floating-rate notes, preference shares and other debt instruments but excluding certificates of deposit and commercial paper issued by banks and building societies, which are shown under market loans.
All investments are reported on a net basis, so that a negative position represents a short position in that particular type of security, for example as a result of borrowing that security.
- UK government bonds includes all bonds issued by central government.
- Other public sector investments includes certificates of tax deposit, local government stocks and bonds which are listed on the London Stock Exchange and UK public corporation stocks and bonds.
- Investments in UK MFIs includes Bank of England euro notes and Bank of England foreign currency bonds.
- Investments in other UK residents includes MFI holdings of equities and bonds issued by the UK non-MFI private sector.
- Investments in non-residents includes deposits (including retained profits) with non-resident offices that have been invested in fixed assets such as premises and equipment.
- Items in suspense and collection includes all debit balances not in customers' names but relating to customers' funds rather than to the reporting institution's own internal funds (e.g. debit balances awaiting transfer to customers' accounts) and balances awaiting settlement of securities transactions.
- Collections comprises cheques etc. drawn, and in course of collection, on other UK MFIs. They include cheques that have been credited to customers' accounts but are held overnight before being presented or paid into the reporting institution's account with another UK MFI or non-resident bank. They exclude cheques already passed to other UK MFIs for collection (these are included under market loans to UK MFIs).They include all collections on non-resident banks and items in transit to non-resident offices of the reporting institution, where the reporting institution is acting as principal and not as an agent for collection and where it has already given credit or value for the items.
- Accrued amounts receivable are gross amounts receivable but which have not yet been received and include interest and other revenues.
- Other assets includes holdings of gold bullion and gold coin (in 'other currency assets'), other commodities (e.g. silver), together with land, premises, plant and equipment and other physical assets owned, or recorded as such, including assets leased out under operating leases and leased in under finance leases. Assets leased out under finance leases are included as loans.
For statistical purposes, the United Kingdom is made up of Great Britain and Northern Ireland, but excludes the Channel Islands and the Isle of Man. UK residents includes:
- HM Government and other UK public authorities
- enterprises which produce goods and services in the UK, including non-resident enterprises' branches and subsidiaries located and operating in the UK
- individuals permanently resident in the UK (including temporary residents who have stayed, or who intend to stay, for a year or more) together with individuals normally resident in the UK who are overseas for less than a year
- members of UK armed forces and officials of HM Government serving overseas, as well as their dependants.
- non-resident governments, together with their diplomatic and military offices and representatives in the UK
- international organisations, including their branches or representatives in the UK
- UK representative offices of non-resident banks
- non-resident offices of the reporting institutions
- enterprises located and operating overseas, including branches and subsidiaries of businesses which are UK residents
- persons (including those of UK origin) who are living outside the UK for a year or more.