Downing Street Says

Put that the Bank of England had just spent £5billion to support the liquidity of financial institutions, the PMS said that he did not think that they had spent £5billion. They had injected that amount into the money markets; clearly it was a loan and it was secured, so they could reasonably think that they would get their money back.

As the Prime Minister had said in his statement, in line with other central banks, the Bank of England had taken this action today. We would not be commenting on the specific action itself, but as the Prime Minister had also said, we would continue to do whatever was necessary in order to maintain stability in the economy.

Asked if people should be troubled that the markets had continued to tumble, the PMS said that he would not comment on day-by-day market movements and neither would people expect him to. As the Prime Minister had been saying in his statement, we would continue to take whatever action was necessary to maintain economic stability and that our economy was resilient and the fundamentals of the economy remained strong.

Asked whether the Prime Minister had had a conversation with President Bush about the current economic situation, the PMS replied that we were in close contact with the US Government and other major economies, as people would expect. Asked if the Prime Minister had spoken to Mervyn King today, the PMS said that he wouldn’t normally be expected to get into the Prime Minister’s specific conversations with named individuals, but there had been close cooperation between the Treasury, the Bank of England and the Financial Services Authority.

Asked about the Chancellor’s letter, the PMS said that it was his understanding that the Treasury would be making the text of the letter available this afternoon. Essentially, what the letter did was to set out the discussions that had been taking place at a European level, most recently at the European Council. We also had detailed discussions when the leaders of the four G7 European countries plus the European Commission met in January and outlined some of the steps going forward.

Asked whether people could expect decisions on these matters, as people seemed to have been talking about things for a long time, the PMS advised people to speak to the Treasury. A lot of the issues were detailed and very technical. It was being taken forward in the G7 as well as the Financial Stability Forum and by financial regulators as well. It was quite a broad range of measures being talked about and each specific proposal was taken forward on its own specific timetable.

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» Monday, March 17, 2008

Economy

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