Consultation outcome

Review of the Cash Ratio Deposit scheme: consultation on proposed changes

From:
HM Treasury
Published
24 September 2021
Last updated
7 June 2022 — See all updates
This consultation has concluded

Download the full outcome

Review of the cash ratio deposit scheme: Policy Statement

Ref: ISBN 978-1-911686-96-5 , 3220

PDF, 166 KB, 9 pages

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Review of the Cash Ratio Deposit Scheme: Summary of consultation responses

PDF, 157 KB, 9 pages

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Detail of outcome

This policy statement details HM Treasury’s policy for replacing the current CRD scheme with the Bank of England levy, a new levy for funding the Bank’s policy functions.

All eligible institutions under the CRD scheme, as well as trade associations, were invited to respond to our consultation. We received six responses in total. For further detail see our summary of responses.

Original consultation

Summary

The government is consulting on the way banks and building societies contribute to funding the Bank of England’s monetary policy and financial stability functions, and proposals for an alternative funding arrangement.

This consultation ran from
to

Consultation description

The Cash Ratio Deposit (CRD) scheme funds the Bank of England’s monetary policy and financial stability functions. Under the scheme, banks and building societies with eligible liabilities of more than £600 million are required to place a proportion of their deposit base with the Bank on a non-interest bearing basis. The Bank then invests these funds in interest bearing assets (e.g. gilts) and the income generated is used to meet the costs of its monetary policy and financial stability functions.

The CRD scheme was placed on a statutory footing by the Bank of England Act 1998. At the last review in 2018 the government committed to review the scheme within five years. The Economic Secretary to the Treasury laid a written ministerial statement on 20 July 2021 announcing the start of this review.

The government will publish a formal response following the consultation.

Documents

Review of the cash ratio deposit scheme: consultation on proposed changes

Ref: ISBN 978-1-911686-15-6 , 3147

PDF, 443 KB, 36 pages

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Published 24 September 2021
Last updated 7 June 2022 + show all updates

  1. Updated with: 'Review of the cash ratio deposit scheme: Policy statement'.

  2. Summary of responses added

  3. First published.

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